National Insurance
From 6 April 2024, the main rates of employee's NIC and NIC for the self-employed are each dropping by two percentage points. For employees this will mean a rate of 8% and for the self-employed it will be 6%. No change to the rate of employer's NIC.
Residential CGT
The rate of CGT on the sale of residential property will go down from 28% to 24% for non-basic rate tax payers from 6 April 2024. This does not apply to the sale of property which is fully within the Principal Private Residence Relief which exempts the overwhelming majority of the sale of homes from CGT.
SDLT – Multiple Dwelling Relief
The rationale behind introducing the multiple dwelling relief from SDLT relating to the purchase of multiple residential properties in one transaction has not achieved its policy ambition of supporting investment in residential property and the private rented sector. This is therefore being abolished, from what looks likely to be 1 June 2024. (The large number of MDR SDLT cases which have been going through the tribunals recently has in our view probably been a significant factor in this abolition). Nothing has been announced on the rule that six or more residential properties can count as commercial so this rule presumably remains. The rule of six or more almost always results in a lower amount of SDLT being due.
VAT Registration Threshold
Despite calls for the VAT registration threshold to be lowered from 1 April 2024 it will be increased from £85,000 per annum to £90,000 per annum.
Non-Doms
Until now if you came to the UK temporarily (Non-Doms) you were able to avoid paying tax on overseas income and gains even if you were tax resident in the UK. From 2025, this advantage will be removed. Instead once these non-Doms have been tax resident in the UK for 4 years they will have to pay UK tax on their worldwide income and gains (subject to potentially relief being obtained pursuant to the terms of any Double Tax Treaty).
UK-ISA
As an addition to the current ISAs (main ISA currently has an investment cap of £20,000 per year) a new ISA is to be introduced where the funds must be invested in UK companies. It will have an annual investment cap of £5,000 and will carry all the usual ISA tax benefits. The scope of what is a UK company is subject to consultation, so this new UK ISA will probably be introduced with effect from 6 April 2025.
Furnished Holiday Letting
Tax advantages currently accrue to individuals who let residential property which is furnished on a series of short lets. These tax advantages are being withdrawn from 6 April 2025.
Regulating Tax Advice
HMRC is consulting on mandating registration for all tax practitioners who wish to interact with HMRC as well as looking to require that all tax practitioners must hold membership of a professional body that is "recognised as having an adequate minimum standard for its members and an adequate supervisory framework to monitor and enforce that standard".
Overseas Workday Relief
From 6 April 2025, eligible employees will also be able to claim Overseas Workday Relief in their first three years of tax residence for income from employment duties carried out overseas.
Employee Ownership Trusts
There was no mention of EOTs despite the recent consultation. We expected offshore trusts of EOTs to be banned and a new requirement introduced so that the Founders could not be the majority of the trustees (or trustee directors) of the EOT. In our view this silence means there will be announcement in the future rather than meaning this has gone away.
This article is created on a general basis for information only and does not constitute legal or other professional advice.
