The Chancellor, Rachel Reeves, has unveiled the Autumn Budget 2024, introducing several significant changes to individual taxation. Here's a breakdown of the key takeaways that will affect your personal finances:
National Insurance
While employees have been spared a National Insurance increase, businesses will see changes:
- Employers' NI contributions will rise by 1.2 percentage points to 15% from April.
- The threshold at which companies start paying NI on an employee's salary will lower from £9,100 to £5,000 per year.
- Small businesses will benefit from an increased employment allowance, rising from £5,000 to £10,500.
Capital Gains Tax
Significant changes to Capital Gains Tax (CGT) rates have been announced:
- The lower rate will increase from 10% to 18%.
- The higher rate will rise from 20% to 24%.
- Property rates remain unchanged at 18% (lower rate) and 24% (higher rate).
- The lifetime limit for business asset disposal relief stays at £1m, with the relief rate increasing gradually from 10% to 18% by 2026.
These changes are expected to raise £2.5bn according to the OBR.
Inheritance Tax
The Chancellor has extended the freeze on inheritance tax thresholds by two years, to 2030. Key points include:
- The tax-free threshold remains at £325,000 for individual estates.
- This increases to £500,000 if the estate includes a residence passed to direct descendants.
- The threshold can reach £1m when passed to a surviving spouse or civil partner.
Additionally, inherited pensions will be subject to inheritance tax from April 2027, and reforms to agricultural and business property relief will be implemented.
Stamp Duty
For those considering second home purchases:
- The stamp duty land tax surcharge for second homes will increase by two percentage points to 5% from Thursday.
Non-Dom Regime
The Chancellor announced the abolition of the non-domicile tax regime from April 2025, to be replaced with a new, residence-based scheme.
Income Tax
In a positive move for taxpayers, Ms. Reeves has ruled out freezing income tax thresholds. From 2028-29, personal tax thresholds will once again be uprated in line with inflation.
These changes will have varying impacts on individuals depending on their financial circumstances. It's advisable to consult with a tax professional to understand how these new measures might affect your personal financial planning.
If you are interested in understanding how these budget changes may impact your personal tax situation, we encourage you to reach out to Apex Consultancy. Our team of experts is ready to provide personalized advice and help you navigate these new tax implications effectively. Contact us today for a consultation!
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