The Chancellor used the 2024 Spring Budget to announce some wide-ranging reforms with a couple of tax cuts and new relief across a range of different taxes.
Our highlights of the announcements include:
- A 2% reduction in the rate of National Insurance Contributions.
- A 4% reduction in Capital Gains Tax for higher rate taxpayers disposing of residential property.
- The abolition of the Furnished Holiday Lettings regime.
- Reform of non-domicile taxation.
- The VAT threshold will also rise by £5,000.
NICs
National Insurance Contributions (NICs)
From 6 April 2024:
- The main rate of employee Class 1 NICs is reduced by 2%, from 10% to 8%.
- The main rate of self-employed Class 4 NICs is also reduced by 2%, from 8% to 6%.
See Spring Budget 2024: National Insurance Contributions (NICs)
Land & Property
Capital Gains Tax (CGT) Rate for Residential Property Sales
From 6 April 2024
- A reduction in the higher rate of CGT from 28% to 24% for sales of residential property.
- The lower rate of tax remains at 18% for any gains that fall within an individual's basic rate band.
Furnished Holiday Lettings Tax Regime
From April 2025
- The Furnished Holiday Lettings tax regime is to be abolished.
The government had identified the distortions created in local economies as a result of the regime which allows this form of letting to be treated as a trade for Income Tax, Capital Gains Tax and Corporation Tax.
Stamp Duty Land Tax (SDLT)
From 1 June 2024, with transitional rules for contracts exchanged on or before 6 March 2024.
- The abolition of abolition of Multiple Dwellings Relief (MDR) from Stamp Duty Land Tax (SDLT).
- A consultation concluded that it does not support investment in residential property in the private rented sector.
SDLT: Acquisitions by Registered Social Landlords and Public Bodies
- A technical change to the SDLT legislation to remove some out-of-date definitions will ensure public bodies will be removed from the scope of the 15% SDLT higher rate charge where the effective date of transaction (usually the date of completion) is on or after 6 March 2024.
SDLT First-time Buyers' Relief
- A change to the conditions for First-time Buyers' Relief to assist the victims of domestic abuse who use a nominee or bare trust arrangements to prevent former partners from finding their new address were previously unable to claim relief.
Investment Zones
- The duration of Investment Zones will be extended from five to ten years in Scotland and Wales, with further details of their four zones being announced later this year.
- Details on the Northern Ireland Enhanced Investment Zone will also be published soon.
See Spring Budget 2024: Land & Property
Overseas and Residence
Non-domiciled taxpayers
From 6 April 2025:
- The remittance basis will be abolished and replaced with a new opt-in residence-based regime.
- Individuals in the new regime will not pay UK tax on foreign income and gains for the first four years of UK tax residence.
- Transitional rules will apply to existing individuals claiming the remittance basis.
- Overseas Workday Relief will be reformed with eligibility for the relief based on the new residence-based regime.
- Inheritance Tax will also move to a residence-based regime, with a 10-year exemption and 'tail-provision' periods for arrivers and leavers.
Transfer Of Assets Abroad (TOAA)
From 6 April 2024:
- Legislation in Spring Finance Bill 2024 will prevent UK resident individuals from bypassing the TOAA provisions by using a close company to transfer assets offshore.
See Spring Budget 2024: Non-domiciled individuals
Income tax claims and reliefs
Higher-Income Child Benefit Charge (HICBC)
- Reform of the Higher-Income Child Benefit Charge and the creation of a household-based system from April 2026.
- Consulting on the rules for allowing HMRC to collect details of household income.
- Threshold raised from £50,000 to £60,000 and bring the taper up to £80,000 from £60,000.
ISA & Investments
- Issue of a new British savings bond.
- Reform of the ISA system to encourage investment in UK assets.
- A £5,000 new UK investment ISA on top of existing ISA allowances.
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.
See Spring Budget 2024: Income Tax Claims and Reliefs
Corporation Tax
Extension to Full Expensing for leasing
From TBC:
- Draft legislation will be published shortly to extend Full Expensing and the 50% First Year Allowance (FYA). to expenditure on assets for leasing.
- The extension will take place when fiscal conditions allow.
UK Independent Film Tax Credit (IFTC)
From 1 April 2024:
- The UK IFTC will enable eligible films to claim enhanced Audio-Visual Expenditure Credit (AVEC), at a rate of 53%, on their qualifying expenditure.
- Available for films with budgets under £15 million.
- Qualifying expenditure will be capped at a maximum of 80% of a film’s total core expenditure.
Permanent rates of relief for Theatre, Orchestra, Museum and Galleries Tax Relief
From 1 April 2025:
- Permanent headline rates of relief for Theatre Tax Relief, Orchestra Relief, and Museums and Galleries Exhibition Tax Relief.
- Rates will be permanently set at 40% for non-touring productions and 45% for touring and all orchestra productions.
- The sunset clause for Museums and Galleries Exhibition Tax Relief will be removed.
Additional tax relief for expenditure on visual effects
From 1 April 2025:
- A 39% tax credit for visual effects costs in films and high-end TV under the AVEC.
- The 80% cap on qualifying expenditures will be removed.
- A consultation will be released on which expenses qualify for the additional tax relief.
Business rates for film studios
From 1 April 2024:
- Eligible film studios in England will receive a 40% reduction in gross Business rates until 2034, with relief backdated to 1 April 2024.
- Studios will still be able to claim Improvement Relief where qualifying conditions are met.
See Spring Budget 2024: Corporation Tax
VAT
Registration/deregistration thresholds increase by £5,000
From 1 April 2024
- The VAT registration threshold increases to £90,000 from £85,000.
- The VAT deregistration threshold increases from £83,000 to £88,000.
VAT DIY Housebuilders: new information powers
From the date of Royal Assent to Spring Finance Bill 2024
- Additional powers for HMRC to request further evidential documentation about a DIY housebuilder’s claim.
Inheritance Tax (IHT)
Scope of IHT
From 6 April 2025 at the earliest:
- Inheritance Tax will move to a residence-based regime, with a 10-year exemption and 'tail-provision' periods for arrivers and leavers.
Payment of IHT
From 1 April 2024:
- Personal representatives of estates will no longer need to have sought commercial loans to pay IHT before applying to obtain a ‘grant on credit’ from HMRC.
Agricultural Property Relief (APR) and Woodlands Relief
From 6 April 2024:
- As previously announced, legislation will be included in Spring Finance Bill 2024 to restrict the scope of APR and Woodlands Relief to property in the UK.
From 6 April 2025:
- Legislation in a future Finance Bill will extend the scope of APR to environmental land management.
See Spring Budget 2024: Inheritance Tax
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