Spring Budget 2024 introduced a new allowance for a UK-focused ISA, increased the High-Income Child Benefit Charge threshold, added a new bond, made changes to Gift Aid and the Transfer of Assets Abroad rules.
Key announcements in Spring Budget 2024 include:
- From 6 April 2024, there is an increase in the adjusted net income threshold for the High-Income Child Benefit Charge (HICBC) from £50,000 to £60,000 and a taper up to £80,000.
- Savings rate relief remains at earlier levels, a zero per cent band for the starting rate for savings income at its current level of £5,000 to 2025.
- A new £5,000 allowance, in addition to the existing ISA allowance, will provide a new tax-free savings opportunity for people to invest in the UK.
High-Income Child Benefit Charge (HICBC)
- From 6 April 2024, there is an increase in the adjusted net income threshold for the High-Income Child Benefit Charge (HICBC) from £50,000 to £60,000.
- For individuals with income above £80,000, the tax charged will be equal to the amount of the Child Benefit payment.
- For those with income between £60,000 and £80,000, the rate at which HICBC is charged is halved.
- This will be equal to one per cent for every £200 of income that exceeds £60,000.
- The amount of Child Benefit payable will be unaffected by these changes.
- For new Child Benefit claims made after 6 April 2024, any backdated payment will be treated for HICBC purposes as if the entitlement fell in the 2024 to 2025 tax year if backdating would otherwise create a HICBC liability in the 2023 to 2024 tax year.
- Creating a household-based system from April 2026.
- There will be a consultation on the rules for allowing HMRC to collect details of household income.
See High Income Child Benefit Charge (HICBC)
Individual Savings Accounts (ISAs)
Spring Budget 2024 announced the introduction of a UK-focused ISA.
- It gives an additional £5,000 allowance to the current £20,000 limit for those investing in the new ISA, ideally supporting UK companies.
- HM Treasury opened a Consultation inviting views on how to design and implement the UK ISA. It runs from 6 March 2024 to 6 June 2024.
British Savings Bonds
The Chancellor announced the creation of a new British Savings Bonds.
- It will be delivered through National Savings and Investments and will be launched in April 2024.
- This product will offer a guaranteed interest rate, fixed for three years, increasing the savings opportunities available to consumers.
- See NS&L (external link)
Transfer of Assets Abroad (TOAA)
From 6 April 2024:
- Legislation in Spring Finance Bill 2024 will deem individuals who are participators in a close company, or a non-resident company that would be close if they were UK resident, as transferors.
- This change will ensure that a transfer made via a company, in which the individual is an owner or has a financial interest, will be considered a ‘relevant transfer’ by that individual for the purposes of the TOAA legislation.
See Transfer of Assets Abroad (subscriber guide)
Gift Aid
From TBC:
- The Gift Aid legislation will be amended to ensure that eligible charities which operate subscription models can continue to claim Gift Aid while complying with the Digital Markets, Competition, and Consumers Bill.
- It is intended that these amendments to the Gift Aid regime will be in place by the time the relevant provisions of the Bill come into force.
Topical guides on this topic
Spring Budget 2024: At a glance
A summary of the key measures announced that affect individuals and businesses.
High-Income Child Benefit Tax Charge
What is the High-Income Child Benefit Charge? Who pays it? Can you appeal against an assessment? Are there any useful cases from the tax tribunals?
ISA guide
What is an ISA? What are the limits? How are ISAs taxed?
Transfer of Assets Abroad (TAA)
What are the TOAA rules? When do they apply? How is the tax charge calculated? Is there any defence against the rules?
