Here is a summary of the first Labour Budget in 14 years and it’s not great if you have owned assets.
If you have saved into a pension and own your own home and have savings then it is highly likely that when you leave this world your children will now be faced with a significant Inheritance Tax Liability.
If you have any concerns or would like any tax planning for Inheritance Tax then please contact our office: 01142630600

Tax changes
– For April 2025, the National Living Wage will rise by 6.7% to £12.21 per hour, worth around £1,400 per year for a full-time worker.
– The National Minimum Wage for 18-20 years olds will increase by 16.3% to £10 per hour.
– Capital Gains Tax (CGT) will see the lower rate increasing from 10% to 18%, and the higher rate increasing from 20% to 24%.
However, CGT on residential property remains unchanged at 18% and 28%.
– Business Asset Disposal Relief (BADR) maintained at £1m, however the 10% rate for 24/25 rises to 14% in 25/26 and 18% in 26/27.
– Employers will see an increase in NIC by 1.2 percentage points, to 15% from April 2025, with the threshold decreasing (at which NIC becomes payable) from £9,100 to £5,000.
– There will be an increase in Employment Allowance from £5,000 to £10,500.
– The Inheritance tax threshold will be frozen until 2030, with inherited pensions to be included from April 2027.
– APR/BPR to be restricted to £1m from 2026, above £1m to receive 50% relief
– There is to be 50% IHT relief for AIM and similar shares.
– The Non-Domiciled tax regime is to be abolished from April 2025, with a new residence scheme to be introduced.
– As pre-announced VAT at 20% will be levied on private school fees from 1 January 2025, with business rates to be removed
– Stamp Duty Land Tax (SDLT) will see the surcharge rise from 3% to 5% on second homes from 31 October 2024.
– The main rate of Corporation Tax to be maintained at 25% through to the end of this Parliament. Full Expensing and Annual Investment Allowance maintained at current rates. A corporation tax
roadmap to be published today.
– Business rates – existing 40% on business rates for the retail, hospitality and leisure industries will continue in 2025/26 up to a cap of £110,000 per business.
– Electric cars incentives to remain in place until 2028.
– Fuel duty is frozen until 25/26, representing a saving of around £59 for an average driver.
– Enterprise Investment Scheme (EIS) to remain until 2035.
– The energy profits levy is to increase from 35% to 38%
– The carried interest rate, which is payable on compensation received by general partners of private equity and hedge funds etc. is to increase to 32% from April 2025
– Duty on tobacco is to rise with RPI
– A cut of 1.7% in alcohol duty on draught products below 8.5%, meaning an average ABV strength pint will pay 1p less in duty. – WOW!!
– Air Duty will be increased by no more than £2 per person per flight, for an economy class short haul flight, compared to an increase of 50% on private jets (equivalent to £450 per passenger)

Spending
– There is to be funding for those affected by the infected blood scandal and the post office Horizon scandal
– Skills England will be consulted upon with a wide range of partners to ensure that it is meeting the needs of employers, providers and learners, to secure good value for money
– The National Wealth Fund will see an investment of £70bn.-
– The HMRC will be modernised with new technology and staff to crack down on tax avoidance scheme promoters and tax evasion.
– There will be a ‘Get Britain Working’ white paper released to table those who are economically inactive.

Disclaimer:
All data is for discussion and we can not accept any responsibility for inaccuracies contained in this blog.
31/10/2024