Lucy Orrow - Lambert Chapman PartnerAs with any Budget in the modern era, the headlines are generally leaked before the event and the Chancellor was left to fill in the blanks as I sat and watched Spring Budget 2024 this afternoon.

For taxpayers, there were any number of points to grab hold of, which may impact upcoming decisions.


Short Term Decisions

If you are selling a residential property in the next few weeks, you may wish to hold off exchanging contracts.  With the higher rate of capital gains tax reducing from 28% to 24%, holding off a transaction for 1 month could save you £s.  However, with the reduction in the annual exemption by £3,000, making the sale now is still more equitable, if you haven’t already utilised the relief.

ISAs have long been a popular way to save, whilst saving tax.  The amount available to invest has been increased over the years, to the current £20,000 annually.  With the Chancellor keen to boost the UK economy, he is looking to give an increase in this amount by £5,000 for UK investments.

Stamp Duty Land Tax is a complex area of legislation and multiple dwellings relief, is just one such example.  From 1 June, this relief will be abolished meaning that the purchase of 2 or more dwellings, will be treated the same as buying just one. Previously this relief averaged the purchase across the properties, often giving a lower charge to Stamp Duty Land Tax.  Now all purchases will be taxed on the aggregate value of the purchase.

For contracts exchanged on or before today, 6 March 2024, the relief remains available, along with contracts substantially performed by 1 June 2024.  If you think you may be eligible for this relief, please liaise with your conveyancing solicitor.

Good news for workers, with further cuts in the national insurance rates by 2%.  Employees will now pay just 8% of income from April 2024 and self-employed workers just 6%.

With the VAT reporting threshold creeping up to £90,000 from £85,000 – the self employed could see real savings in their pockets.

The removal of the furnished holiday lettings tax regime from April 2025, will eliminate the tax advantage for landlords who let out short-term furnished holiday properties over those who let out residential properties to longer-term tenants. Legislation will be introduced to stop the sale of such properties in order to obtain the beneficial capital gains tax rate with immediate effect.


Long Term Plans

Child Benefit Charge has long been inequitable, with dual income households benefiting.  The Chancellor wants to change this to a fairer position but this will require significant legislative change.  In the interim, the minimum income level will increase to £60,000 before any clawback is made.  With full restriction being at £80,000.

Making Tax Digital remains on the roster.  Businesses and landlords with income in excess of £50,000 being required to report from April 2026 and those with £30,000 from April 2027.  Full access to testing software is expected from April 2025 and those individuals wishing to test the system will obtain access to the new penalties regime.


Planning Decisions

Domicile has been a status in tax law with ever changing rules since 1861.  This latest proposal seeks to remove the domicile status in its entirety.

From April 2025, the Government will introduce a new residency based regime which will allow new arrivals to claim 100% tax relief from foreign income in the first 4 years, without any restriction on remitting funds.  They will lose entitlement to the personal allowance and capital gains tax annual exempt allowance, as happens now under the remittance basis rules.

Existing tax residents can opt in to this scheme but will be taxed on worldwide income from their 4th year of residency.  The final year of remittance basis reporting will be 2024/25.

From April 2025, individuals previously reporting under the remittance basis of taxation, will be able to remit foreign income and gains for prior periods at just 12%.  This option will be available for 2025/26 and 2026/27 only.

Inheritance tax remains but one measure which will affect a limited number, is the change of status of land and/or woodlands outside the UK. Previously land and woodland in the EEA was potentially eligible for agricultural property relief. Following our departure from the EU, this has now been restricted to land and woodland in the UK, for transfers from 6 April 2024.

A review of Inheritance Tax for non-domiciles remains under review.  Only trusts settled by non-UK domiciled individuals prior to April 2025 will be guaranteed to not be caught under any new rules introduction.

With a number of complex rule changes, we are always here to discuss plans and work together to resolve problems. Get in touch and we will be happy to help.



Lambert Chapman Chartered Accountants

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

By submitting your details you agree to receive email marketing from Lambert Chapman and have read and understood our Privacy Notice. You can withdraw your consent or change your preferences at any time by emailing us or by clicking the link at the bottom of every email we send you.

You have Successfully Subscribed!