Chancellor of the Exchequer's Spring Budget

The rate of Capital Gains Tax paid by higher-rate taxpayers, and by trustees and personal representatives, on residential property not eligible for Private Residence Relief will be cut from 28% to 24% for gains accruing on or after 6 April 2024.  The lower rate will remain at 18% for any gains that fall within the taxpayer’s unused basic rate band. 

Where more than one residential property is acquired at the same time, the calculation of the Stamp Duty payable is based upon the total consideration divided by the number of properties acquired.  This is known as Multiple Dwellings Relief.   This relief is to be abolished from 1 June 2024 with the effect that the Stamp Duty Land Tax rates and thresholds will be applied to the whole transaction. 

Where a property business consists of the commercial letting of accommodation to the public generally as holiday accommodation for at least 210 days and is so let for at least 105 such days in a year, additional tax reliefs are available. The Chancellor has announced that this regime will be abolished from 6 April 2025 such that lettings will be treated in the same way as other residential property letting income.  As a consequence inter-alia, the following benefits will be lost: 

Income tax –  

Full tax relief for interest paid; 

Capital allowances in respect of capital expenditure; 

Relevant earnings for pension contributions 

Capital Gains Tax –  

Business Asset Disposal Relief; 

Rollover relief; 

Holdover relief; 

Substantial Shareholding Exemption for companies 

The main rate of National Insurance for employees had been cut from 12% to 10% with effect from 6 January 2024.  With effect from 6 April 2024 the rate further reduces to 8%.  This rate applies for annual earnings between £12,570 and £50,270.  Excess earnings over £50,270 will continue being charged at 2%. For self-employed individuals the rate of National Insurance had been due to reduce from 9% to 8% with effect from 6 April 2024.  The rate will now reduce to 6% with effect from 6 April 2024.  This applies to profits between £12,570 and £50,270, with profits over £50,270 continuing to be charged at 2%. 

The VAT registration threshold will increase from £85,000 to £90,000 on 1 April 2024.  The VAT deregistration threshold will change from £83,000 to £88,000 on the same date. 

At present, this charge is imposed on an individual whose adjusted net income exceeds £50,000 in a tax year and who is, or whose partner is, in receipt of child benefit.  From 6 April 2024, this limit is to be increased to £60,000 and the tapering of the relief is to be increased to an income level of £80,000 (from £60,000). It is proposed from 6 April 2026 that the charge will become ‘household based’ i.e. that the income of the household be combined in calculating the charge. 

The Chancellor has proposed to abolish the current system from April 2025 in respect of new arrivals.  They will pay no tax on their foreign income and gains for 4 years but after this will then be taxed at the same rates as other UK taxpayers.  There will be transitional arrangements for existing non-domiciled residents.Lorem Ipsum is simply dummy text of the printing and typesetting industry.