Autumn Budget 2024 – A Bite-Sized Summary

On October 30, the Chancellor presented the Autumn Budget, introducing £40 billion in tax increases alongside a growth-focused agenda. This marks both the first Budget from the new Labour government and the first from a female Chancellor. Key measures include immediate hikes in Capital Gains Tax, a substantial limitation on inheritance tax relief for business and agricultural assets, and additional information on sweeping reforms to non-domiciled taxation.

As with previous Budgets, we will see a number of consultations and further details shared over the next few weeks.

Business Taxation

Corporation tax

The corporate tax roadmap outlines the main components of the Corporation Tax system for this Parliament, which include:

• Setting a maximum Corporation Tax rate of 25%
• Retaining the Small Profits Rate and marginal relief at existing levels and thresholds
• Preserving the policy of full expensing on a permanent basis
• Keeping the £1 million Annual Investment Allowance, along with current writing down allowances and the Structures and Buildings Allowance
• Sustaining the current rates for the unified R&D Expenditure Credit scheme, as well as the Enhanced Support for R&D-focused SMEs
• Continuing the Patent Box initiative.

This roadmap provides clarity on Corporation Tax policy for the current legislative period.

Making tax digital – MTD

The Making Tax Digital (MTD) initiative for Income Tax will be extended to include sole traders and landlords earning over £20,000 by the close of this Parliament. This expansion builds on the current MTD timeline, which mandates that sole traders and landlords with income over £50,000 comply by April 2026, followed by those earning over £30,000 by April 2027.

Registration of tax advisers

Amid concerns about a minority of unqualified tax advisers who may not be giving good advice, and to strengthening the regulatory framework applicable to tax advisers, from April 2026, all tax advisers who interact with HMRC on behalf of a client – and who are not already members of a regulated profession, such as solicitors, barristers or auditors – will have to register with HMRC first.

Interest rates

An unexpected change is the upcoming rise in the interest rate on late tax payments. Starting 6 April 2025, HMRC will increase the rate by 1.5 percentage points, raising it from the bank base rate plus 2.5% to the base rate plus 4%.

If the base rate remains at 5%, this will mean an increase in the interest on late tax payments from the current 7.5% to 9%. Meanwhile, the interest rate on tax overpayments appears to stay at the base rate minus 1%, resulting in a 4% interest rate on repayments at the current base rate.

Capital allowances: Key features to remain

The government has announced it will retain significant elements of the capital allowances system, including the following:

• Full Expensing: A 100% first-year allowance will apply to qualifying new main rate plant and machinery, and a 50% first-year allowance for special rate machinery, positioning the UK as the only major economy offering permanent full expensing.
• Annual Investment Allowance: Businesses, including unincorporated ones, will continue to benefit from a 100% first-year relief on plant and machinery investments up to £1 million.
• Writing Down Allowances: Flexibility remains for businesses to choose allowances they claim for main and special rate machinery.
• Structures and Buildings Allowance: Relief will be provided for capital expenses related to the purchase, construction, and renovation of new non-residential structures and buildings.

Full Expensing Deduction for Leased Assets

The Chancellor also revealed plans to extend full expensing tax relief to leased assets. This will allow businesses to improve productivity by leasing updated efficient plant and machinery. While no timeline is set, draft legislation for this relief is forthcoming.

Value-added tax – VAT thresholds

Effective 1 April 2024, the threshold for mandatory VAT registration will increase from £85,000 to £90,000 in taxable turnover, and the threshold for optional VAT deregistration will rise from £83,000 to £88,000. No additional VAT adjustments were announced.

Abolition of furnished holiday lettings (FHL) regime

The government will abolish the Furnished Holiday Lettings (FHL) tax regime as of April 2025. This change aims to equalize the tax treatment of landlords who rent short-term furnished holiday properties with those offering long-term residential rentals.

Currently, the FHL regime provides landlords with certain tax benefits, such as the ability to deduct full mortgage interest from rental income, access to capital allowances for furnishings, lower Capital Gains Tax (CGT) rates upon sale, and eligibility for CGT rollover relief. These benefits will no longer apply after the regime is phased out.

 

Property Taxation

Stamp duty land tax – SDLT

Stamp Duty Land Tax (SDLT) rates on residential property transactions are seeing significant increases. From 31 October, following the budget announcement (with transitional provisions for existing contracts), the SDLT surcharge on additional residential property purchases rises from 3% to 5%. Similarly, the flat SDLT rate for high-value dwellings acquired by companies and other “non-natural persons” will increase from 15% to 17%.

Additionally, with the 2% surcharge for non-resident buyers, some purchasers may now face SDLT rates as high as 19%. If the government proceeds with its manifesto plan to raise the non-resident surcharge from 2% to 3%, the maximum SDLT rate could reach 20%, which is notably high for a tax on gross transaction values.

Further changes are set to impact lower-value transactions in April 2025, when the temporary increase in the nil-rate band for residential properties (introduced in 2023) will expire. This will reintroduce the 2% SDLT rate on the £125,000 to £250,000 band, which—with surcharges—could reach rates of 2%, 4%, 7%, or even 9% within this bracket.

These increases apply solely to residential property transactions, as SDLT rates on non-residential properties remain unchanged, capped at 5% for transactions over £250,000. This divergence in SDLT treatment between residential and non-residential properties continues to widen, creating additional scrutiny on “mixed-use” transactions, which are sometimes eligible for non-residential rates. Given the potential for tax savings in mixed-use transactions, it is likely HMRC may revisit previous proposals to split “mixed-use” transactions between residential and non-residential components, rather than applying non-residential rates broadly.

Business rates and relief measures

The small business multiplier, along with Small Business Rates Relief, will remain frozen through the 2025-26 period. Starting in 2026-27, the government plans to establish permanently lower business rate multipliers for retail, hospitality, and leisure (RHL) properties on the high street. To support this change, funding will be sourced by applying a higher multiplier to the most valuable properties.

Non-Domicile Taxation

The UK government is implementing significant changes to the tax rules for non-domiciled individuals, inheritance tax, and capital allowances. Below are the key aspects of the new tax regime, effective from April 2025.

 New residence-based tax regime

• Abolition of the “non-dom” status: Starting 6 April 2025, the existing “non-dom” regime will end, replaced by a residence-based system. Under this, individuals will pay tax on their worldwide income and gains after four years of UK residence.
• Temporary repatriation facility (TRF): For those who have previously claimed the remittance basis, a reduced tax rate will apply on pre-2025 income and gains if brought to the UK within a designated three-year period (2025-2028). This facility has been extended to include trust benefits received before April 2025.
• Inheritance tax on long-term residents: Individuals will be subject to UK inheritance tax on their worldwide estate if they have been UK residents for 10 of the previous 20 years.

New foreign income and gains (FIG) regime

• Four-year relief for new arrivals: Individuals who have not been UK residents in the past 10 years will benefit from a four-year exemption on foreign income and gains (FIG) upon becoming UK residents.
• Post-four-year period: After this initial period, FIG will be taxed regardless of where it is held.
• Claim requirements: FIG relief must be claimed, with individuals required to specify sources of income and gains for which relief is sought.

Application to trusts

• Trust distributions: Beneficiaries who qualify for FIG relief can claim it on distributions from non-UK trusts.
• Trusts with UK-resident settlors: The tax protections for non-UK trusts will be removed, and FIG arising in settlor-interested trusts with UK-resident settlors will be taxed on the settlor unless FIG relief is claimed.

Inheritance tax for long-term residents and trusts

• Long-term residents: Once an individual becomes a UK resident for 10 of the last 20 years, they will be subject to inheritance tax on their global estate, even if they later leave the UK. However, if a long-term resident leaves the UK, their worldwide inheritance tax exposure gradually reduces and ends after 10 non-resident years.
• Trusts and inheritance tax: Non-UK assets in trusts will no longer be permanently excluded from inheritance tax. The inheritance tax status of trust assets will now depend on the long-term residence of the settlor, regardless of when the assets were settled.

Overseas workday relief (OWR)

• Extended OWR: OWR will remain available but now aligns with the FIG regime’s four-year relief period and introduces an annual cap of the lesser of £300,000 or 30% of eligible employment income.

 Rebasing of foreign assets

• Asset rebasing to 2017 Values: Non-domiciled individuals who have claimed the remittance basis between 2017/18 and 2024/25 can rebase their foreign assets to their market value as of 5 April 2017, for disposals post-April 2025.

Transition rules for trusts

• Excluded property trusts before October 2024: Non-UK assets in “excluded property” trusts before 30 October 2024, will have certain transitional protections, limiting their exposure to the gift with reservation of benefit rules and the new inheritance tax rules.
• Trust assets held by deceased settlors: Where a settlor has passed away before April 6, 2025, the inheritance tax status of non-UK trust assets will depend on the settlor’s domicile status at the time assets were settled, according to the previous rules.

These changes indicate a move towards broader tax obligations for individuals and trusts linked to the UK, with specific provisions for long-term residents and certain transitional protections for trusts established prior to the new regime.

Private Client Taxation

Inheritance tax (IHT)

On 6 April 2026, adjustments to inheritance tax and property reliefs will take effect. Although Rachel Reeves’ recent Budget announcements made fewer modifications than anticipated, some important changes are on the way, particularly regarding agricultural and business property relief (APR and BPR).

APR and BPR relief cap

From 6 April 2026, 100% APR and BPR will be limited to the first £1 million of agricultural and business property combined, with 50% relief on any amount above that. This cap raises the effective IHT rate for larger estates with such property, targeting a perceived ‘loophole’ while respecting the reliefs’ purpose.

Each individual can access the allowance on IHT arising from death or lifetime gifts, though unused allowances won’t transfer to a spouse or civil partner. Together, however, couples can access £2 million in relief. Lifetime gifts made now will be subject to the cap if the donor does not survive for seven years and dies on or after 6 April 2026.

The allowance will extend to trusts holding agricultural and business property, applying to each trust created by the same settlor before the Budget. New trusts post-budget will share a combined allowance. A consultation in early 2025 will clarify further application to trusts.

Investments in the AIM market will retain BPR eligibility but at a reduced relief rate of 50% across all cases. They will not count towards the new allowance, preserving this avenue for tax planning.

IHT on agricultural and business property will still offer a 10-year installment payment option, typically interest-free on qualifying property.

IHT threshold freeze

Current thresholds remain frozen until 6 April 2030. The standard nil rate band stays at £325,000 (set in 2009), while the additional residence nil rate band, applicable to estates passing residential property to lineal descendants, remains at £175,000.

Pensions

From 6 April 2027, unspent pension funds and death benefits will be subject to IHT, payable by scheme administrators. This change marks a shift, as discretionary death benefits were previously IHT-exempt. Pensions will also see the introduction of a six-month payment deadline for IHT upon death, and potential income tax liability for family withdrawals, creating an element of double taxation.

Capital gains tax (CGT)

CGT saw immediate rate changes. For disposals after Budget day, the lower individual rate has increased from 10% to 18%, and 20% to 24% for higher-rate taxpayers, trustees, and executors. Gains arising from unconditional contracts before 30 October but yet to be completed will remain at previous rates, with specific anti-avoidance measures for gains over £100,000.

The CGT rate for business asset disposal relief (BADR) and investors’ relief will increase in phases, reaching 18% by April 2026, with lifetime gain limits reduced to £1 million for both reliefs.

New carried interest rules introduce a 32% flat CGT rate from 2025-26, shifting to income tax and class 4 NICs in 2026. Consultations will address these adjustments further.

Income tax, NICs, and VAT

Income tax rates, employee NICs, and VAT will remain unchanged. Employer NICs will rise from 13.8% to 15% in April 2025, constituting a significant revenue measure. ISA subscription caps are fixed until April 2030, and a 20% VAT on private school fees and boarding costs begins on 1 January 2025.

 

Income tax rates: England, Wales & Northern Ireland (non-dividend income)	2025/26	2024/25
0% starting rate for savings only	Up to £5,000	Up to £5,000
0% on personal allowance (subject to any clawback of PA)	£0 – £12,570	£0 – £12,570
20% basic rate tax	£12,571 – £50,270	£12,571 – £50,270
40% higher rate tax	£50,271 – £125,140	£50,271 – £125,140
45% additional rate tax	Above £125,140	Above £125,140
Scottish rates of income tax (non-dividend income)
0% on personal allowance (subject to any clawback of PA)	£0 – £12,570	£0 – £12,570
19% starting rate	£12,571 – £14,876	£12,571 – £14,876
20% basic rate tax	£14,877 – £26,561	£14,877 – £26,561
21% intermediate rate tax	£26,562 – £43,662	£26,562 – £43,662
42% higher rate tax	£43,663 – £75,000	£43,663 – £75,000
45% advanced rate	£75,001 – £125,140	£75,001 – £125,140
48% top rate (47% for 2023-24)	Above £125,140	Above £125,140
Income tax rates (dividend income)
Dividend ordinary rate (for dividends within basic rate band)	8.75%	8.75%
Dividend upper rate (for dividends within higher rate band)	33.75%	33.75%
Dividend additional rate (for dividends above higher rate band)	39.35%	39.35%
Personal Allowances
Personal allowance	£12,570	£12,570
Dividend allowance (no allowance for trustees)	£500	£500
Maximum married couple’s allowance for those born before 6 April 1935	£11,270	£11,080
Married couple’s allowance – minimum amount	£4,360	£4,280
Micro entrepreneur’s allowance (property or trading income)	£1,000 each	£1,000 each
Income limit for personal allowance	£100,000	£100,000
Income limit for married couple’s allowance: born before 6 April 1935	£37,700	£37,000
Blind person’s allowance	£3,130	£3,070
Rent-a-room relief	£7,500	£7,500
Transferable/shareable tax allowance for married couples and civil partners	£1,260	£1,260
Personal savings allowance for basic rate taxpayers	£1,000	£1,000
Personal savings allowance for higher-rate taxpayers	£500	£500
Personal savings allowance for additional rate taxpayers	£0	£0

National insurance	2025/26	2024/25
Lower earnings limit, primary class 1 (per week)	£125	£123
Upper earnings limit, primary class 1 (per week)	£967	£967
Apprentice upper secondary threshold (AUST) for under 21s/25s	£967	£967
Primary threshold (per week)	£242	£242
Secondary threshold (per week)	£96	£175
Employment allowance (per year/employer)	£10,500	£5,000
Employee’s primary class 1 rate between primary threshold and upper earnings limit	8%	8%
Employee’s primary class 1 rate above upper earnings limit	2%	2%
Married woman’s reduced rate between primary threshold and upper earnings limit	1.85%	1.85%
Married woman’s rate above upper earnings limit	2%	2%
Employer’s secondary class 1 rate above secondary threshold	15%	13.8%
Class 2 small profits threshold (per year)	£6,845	£6,725
Class 2 lower profits threshold (per year)	£12,570	£12,570
Class 2 (where profits are below small profit threshold (voluntary per week))	£3.50	£3.45
Class 2 rate (per week where profits are above small profits threshold)	£0	£0
Class 3 voluntary rate (per week)	£17.75	£17.45
Class 4 lower profits limit	£12,570	£12,570
Class 4 upper profits limit	£50,270	£50,270
Class 4 rate between lower profits limit and upper profits limit	6%	6%
Class 4 rate above upper profits limit	2%	2%
Class 1A/1B NIC	15%	13.8%

 

ENGLAND & NORTHERN IRELAND: STAMP DUTY LAND TAX (SDLT) RATES

 

Residential properties: 23 September 2022 – 30 October 2024

Property value	UK residents		Non-UK residents
	Only property	Additional property	Only property	Additional property
Up to £250,000	Nil	3%	2%	5%
Next portion from £250,001 to £925,000	5%	8%	7%	10%
Next portion from £925,001 to £1,500,000	10%	13%	12%	15%
Remaining amount above £1,500,000	12%	15%	14%	17%

  

Residential properties: 31 October 2024 – 31 March 2025

Property value	UK residents		Non-UK residents
	Only property	Additional property	Only property	Additional property
Up to £250,000	Nil	5%	2%	7%
Next portion from £250,001 to £925,000	5%	10%	7%	12%
Next portion from £925,001 to £1,500,000	10%	15%	12%	17%
Remaining amount above £1,500,000	12%	17%	14%	19%

 

Residential properties: From 1 April 2025

Property value	UK residents		Non-UK residents
	Only property	Additional property	Only property	Additional property
Up to £125,000	Nil	5%	2%	7%
Next portion from £125,001 to £250,000	2%	7%	4%	9%
Next portion from £250,001 to £925,000	5%	10%	7%	12%
Next portion from £925,001 to £1,500,000	10%	15%	12%	17%
Remaining amount above £1,500,000	12%	17%	14%	19%

 

SDLT for first-time buyers from 1 April 2025	Rates of tax
Up to £300,000	Nil
Next portion from £300,001 to £500,000	5%
Remaining amount above £500,000	Standard rates apply

 

SDLT for first-time buyers from 23 September 2022 – 31 March 2025	Rates of tax
Up to £425,000	Nil
Next portion from £425,001 to £625,000	5%
Remaining amount above £625,000	Standard rates apply

 

Non-residential properties or mixed-use properties

Property or lease premium or transfer value	Rates of tax
Up to £150,000	Nil
The next portion from £150,001 to £250,000	2%
The remaining amount above £250,000	5%

 

New leasehold properties: SDLT rates on net present value (NPV) of rent: 23 September 2022 – 31 March 2025

Residential property	Non-residential or mixed-use properties	Rates of tax
Up to £250,000	Up to £150,000	Nil
Over £250,000	Next portion from £150,001 to £5m	1%
	Over £5m	2%

  

New leasehold properties: SDLT rates on net present value (NPV) of rent: From 1 April 2025 onwards

Residential property	Non-residential or mixed-use properties	Rates of tax
Up to £125,000	Up to £150,000	Nil
Over £125,000	Next portion from £150,001 to £5m	1%
	Over £5m	2%

 

SCOTLAND: LAND AND BUILDINGS TRANSACTION TAX (LBTT) RATES

Residential properties: from 16 December 2022

Property or lease premium or transfer value	Only property rates	Additional property rates (note 6)
Up to £145,000 (note 5)	Nil	6%
Next portion from £145,001 to £250,000	2%	8%
Next portion from £250,001 to £325,000	5%	11%
Next portion from £325,001 to £750,000	10%	16%
Remaining amount over £750,000	12%	18%

  

Non-residential properties or mixed-use properties

Property or lease premium or transfer value	Rates of tax
Up to £150,000	Nil
Next portion from £150,001 to £250,000	1%
Remaining amount over £250,000	5%

 

Non-residential leasehold properties: Net present value (NPV) of rent

NPV of rent payable	Rates of tax
Up to £150,000	Nil
Next portion from £150,001 to £2m	1%
Remaining amount over £2m	2%

 

WALES: LAND TRANSACTION TAX (LTT) RATES

Residential properties: from 10 October 2022

Property value	Only property rates	Additional property rates
Up to £180,000	Nil	4%
Next portion from £180,001 to £225,000	Nil	7.5%
Next portion from £225,001 to £250,000	6%	7.5%
Next portion from £250,001 to £400,000	6%	9%
Next portion from £400,001 to £750,000	7.5%	11.5%
Next portion from £750,001 to £1.5m	10.0%	14.0%
Remaining amount over £1.5m	12.0%	16.0%

 

Non-residential properties or mixed-use properties

Property or lease premium or transfer value	Rates of tax
Up to £225,000	Nil
Next portion from £225,001 to £250,000	1%
Next portion from £250,001 to £1m	5%
Remaining amount over £1m	6%

 

Non-residential leasehold properties: LTT rates on NPV of rent

NPV of rent payable	Rates of tax
Up to £225,000	Nil
Next portion from £225,001 to £2m	1%
Remaining amount over £2m	2%

 

Stamp duty on shares and securities

Stamp duty payable on transfer of shares and securities is 0.5%, subject to the value of the consideration being above £1,000.

How BRACC Can Support Your Estate and Tax Planning

Navigating inheritance tax and relief changes can be challenging, especially with the latest adjustments affecting estates, trusts, and other assets. At Bold Rose Accountants, we specialise in providing tailored estate and tax planning strategies that help you maximise reliefs, minimise tax liabilities, and protect your assets for future generations.

Our expert team is here to guide you through each step, offering personalised advice and solutions that fit your unique situation. Whether you’re managing agricultural property, business investments, or pension funds, we provide comprehensive support to help you make the most of available reliefs while staying compliant with the latest regulations.

Ready to optimise your estate planning strategy? Contact us to explore how our services can secure your legacy and give you peace of mind for the future. Let us help you build a plan that’s as dynamic as your goals.

 

BOLD ROSE ACCOUNTANTS LEGAL NOTICE

This technical factsheet is intended solely for informational purposes and should not be considered a replacement for tailored tax and/or legal advice. Although great care has been taken in its preparation, neither Bold Rose Accountants nor its employees can be held liable for any loss resulting from reliance on the information provided herein. You are encouraged to speak to us about your specific situation.