The 2024 Autumn Budget

The 2024 Autumn Budget, delivered by Chancellor Rachel Reeves, marks a significant fiscal shift under the new Labour government. Here are some of the major highlights:

1. Income Tax: The government has decided not to extend the freeze on income tax thresholds beyond the planned period. From 2028/29, thresholds will align with inflation, expected to provide relief for many taxpayers. However, the freeze has already brought in billions in additional revenue, with a substantial rise in the number of taxpayers and overall tax contributions.
2. Capital Gains Tax (CGT): The lower rate of CGT has increased from 10% to 18%, while the higher rate has risen from 20% to 24%, potentially affecting gains from selling assets like shares. The annual CGT allowance remains available, and there are strategies to manage CGT liabilities, such as using losses to offset gains or transferring assets between spouses or civil partners.
3. Inheritance Tax (IHT): The inheritance tax threshold freeze has been extended to 2030, which could increase IHT liabilities in the future. Additionally, inherited pensions will now be subject to IHT from April 2027, a change that may influence estate planning for many.
4. Investment Incentives: Stocks and Shares ISAs and pensions remain advantageous tools for tax efficiency. By maximising ISA and pension allowances, individuals can shield investments from dividend tax and CGT. The budget also highlights mechanisms like the Share Exchange (Bed & ISA) for further tax efficiencies within ISAs.

The Budget’s longer-term effects will become clearer as the economic landscape adapts to these new policies. At Manak Solicitors, we continue to monitor these changes, providing our clients with insights and support on how these updates may impact them financially, particularly in relation to estate planning.