The Chancellor has just sat down from delivering his Budget speech with one or two surprise announcements. Based on the speech and supporting documents, we have picked out some key areas of change:
Property Taxes
- The higher rate of capital gains tax on residential properties will reduce from 28% to 24% from April 2024.
- The favourable tax regime for Furnished Holiday Lettings will be abolished from April 2025.
- Stamp Duty Land Tax multiple dwellings relief will be abolished from June 2024.
Income Tax
- The tax concept of domicile will be abolished, as will the non-domicile tax regime, to be replaced by a residence-based system from April 2025.
- New arrivals to the UK will not be required to pay tax on overseas income and gains for the first four years of residence.
- There will be a two year transitional period for those taking advantage of the existing non-domicile arrangements.
- From April 2024, the annual threshold for the high income child benefit charge will be increased from £50,000 to £60,000 with the higher threshold increasing to £80,000.
- From April 2026, the high income child benefit charge system will move to a collective household income basis.
National Insurance
- From April 2024, employee’s National Insurance Contributions will reduce from 10% to 8%.
- From the same date, National Insurance Contributions for the self-employed will reduce from 8% to 6%.
Other Measures
- An additional £5,000 ISA allowance will become available for investment in UK equities, introducing the so-called “British ISA”.
- A new savings bond delivered through NS&I will offer a guaranteed rate, fixed for three years.
- A new duty is to be introduced for vaping products in October 2026 and at the same time there will be a one-off increase for tobacco duty.
- Fuel duty and alcohol duty is frozen for an extended period.
In addition to the above, there are minor changes in several other areas of tax and we will provide more details of these when they are available.
If you would like to discuss how any of these changes may affect you please contact our Tax Director, Jenny Marks.
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