Autumn Budget 2024: How It Affects Individuals

We share our key takeaways on how the Autumn Budget 2024 affects individuals. During the first Budget to be delivered by a woman, and the first Labour Budget for 14 years, Rachel Reeves set out various measures to “fix the foundations and deliver change”.

Along with Income Tax rates, Labour included a manifesto pledge not to increase National Insurance. However, with little to no mention of Capital Gains Tax (CGT) and Inheritance Tax (IHT), it came as no surprise that today’s Budget speech included significant changes in these areas:

CGT changes announced:

• Lower rate of CGT to rise from 10% to 18%, and the higher rate from 20% to 24%, from 30 October 2024. A surprise to some that the change is with immediate effect.
• Residential property CGT rates maintained at 18% and 24%.
• Business Asset Disposal Relief (BADR) and Investors Relief (IR) increased from 10% to 14% with effect from 6 April 2025, and further to 18% from 6 April 2026. IR lifetime limit also reduced to £1m with immediate effect.

IHT changes:

• With effect from 6 April 2026, Business Property Relief (BPR) and Agricultural Property Relief (APR) will be restricted so that a combined £1million will benefit from 100% relief, with a reduced 50% relief available for the excess over this limit.
• A reduced rate of 50% BPR in all circumstances for shares that are “not listed” on a stock exchange, such as AIM shares.
• IHT introduced on unspent pension pots with effect from April 2027. Subject to consultation.
• The current IHT thresholds were already due to be frozen until April 2028. This is now being extended for a further two years until April 2030. The Nil Rate Band will therefore remain at £325,000.

Other Changes Affecting Individuals:

• The abolition of the Non-Domicile regime with effect from 6 April 2025, replacing it with a residence based regime.
• With effect from 31 October 2024, the Higher Rates for Additional Dwellings surcharge for Stamp Duty Land Tax (SDLT) will be increased by 2%, to 5%.
• With effect from April 2028, Income Tax and National Insurance thresholds will be increased in line with inflation.
• The Budget documentation confirms that the government is committed to delivering Making Tax Digital for Income Tax and Self Assessment (MTD ITSA) and will expand the rollout to those with incomes over £20,000 by the end of this Parliament.
• The new full State Pension will increase from £221.20 a week in 2024-25 to £230.25 a week in 2025-26. This is an increase of £9.05 a week, or £470.60 a year.
• From 1 January 2025, all education services and vocational training provided by a private school in the UK will be subject to VAT at the standard rate of 20%.

With much scaremongering in the run up to the Budget, my initial gut feeling after the event was “actually this is not as bad as it could have been”. An unpopular opinion, perhaps. However, as is always the case, the devil is in the detail!

2024 Autumn Budget Summary:

•  Please click here to read our full 2024 Autumn Budget Summary.

Get In Touch

With so many changes in the Autumn Budget affecting individuals, this is a very brief overview only. For further advice and guidance on your specific circumstances contact your local Whitings LLP Office today.

Disclaimer - All information in this post was correct at time of writing.