Autumn Statement Briefing 2024

Chancellor of the Exchequer Rachel Reeves delivered the Autumn Budget earlier today. Our team of legal and tax experts have analysed the full statement and re-summarised the key announcements below:

Capital Gains Tax

With immediate effect, the rates of Capital Gains Tax will be increased, as follows:

Gains for the basic rate increased from 10% to 18%
Gains for higher or additional rate taxpayers increased from 20% to 24%
The current residential property rates (of 18% or 24%) will remain the same

Business Asset Disposal Relief will retain its £1m lifetime allowance. However, from April 2025, the rate applying will increase to 14% (from the current 10%) and from April 2026, this will increase to 18%.

The rate of Capital Gains Tax applying to carried interest gains (for those involved in private equity investment) will increase to 32% from April 2025. The Government will then consult with a view to wider reforms being introduced from 2026.

Inheritance Tax

The Inheritance Tax nil rate bands currently in place will be further frozen until 2030.

From April 2027 inherited pensions will no longer be exempt from Inheritance Tax.

There will be changes to Agricultural and Business Property Relief from April 2026, as follows:

The first £1m of assets will continue to receive 100% relief (if currently available)
Beyond £1m, the rate of relief will reduce to 50%
For AIM-listed assets securities, the relief will be at 50% regardless of the value
There are separate rules relating to Trusts holding assets qualifying for Agricultural and Business Property Relief, with similar new thresholds and rates applying

Residence and Domicile

The previously announced changes initially announced by the Conservative Government and adjusted in Labour's manifesto will be effective from 6 April 2025. In summary, the current domicile system is being abolished with a new residency-based system being introduced affecting both individuals and Trusts. Further details on these changes will be available on our website shortly.

Income Tax and National Insurance Thresholds

The freezing of Income Tax and National Insurance thresholds will remain in place until 5 April 2028. After this, they will increase by the rate of inflation. For Scottish taxpayers, this will only apply to income from savings and investments.

Employers National Insurance

The rate of employers National Insurance will increase with effect from April 2025. The key changes here are:

The main rate of employers national insurance to increase from 13.8% to 15%
The threshold, above which employers' national insurance is payable is reduced from £9,100 to £5,000
The employment allowance will increase for qualifying employers from £5,000 per annum to £10,500 per annum

Stamp Duty Land Tax

While not applicable to property purchases in Scotland, the higher rate of SDLT (the equivalent of the Additional Dwelling Supplement in Scotland) will increase from 3% to 5% with effect from 31 October 2024 and by 2% across the other bands.

Transitional relief is available for contracts entered into before 31 October, where the land transaction is on or after 31 October.

Next Steps

Following the Autumn Statement, we have provided more information on each of the below topics which you can read more about:

These are significant changes and much of the finer detail is yet to be confirmed, but please contact your usual Turcan Connell contact or Kenny MacDonald (Head of Tax Services), if there is anything that you would like to discuss at this stage.