Chancellor Rachel Reeves’ Autumn Budget 2024 introduced significant fiscal changes aimed at addressing some of the UK’s economic challenges.
These measures have notable implications for individuals, especially high-net-worth individuals (HNWIs).
In our latest blog we discuss how they might affect you.
Key Tax Reforms Affecting Individuals
- Inheritance Tax (IHT) Adjustments: The Chancellor has extended the freeze on IHT thresholds until 2030, maintaining the nil-rate band at £325,000. Additionally, from April 2027, pensions will be included in the taxable estate for IHT purposes, potentially increasing the tax liability for beneficiaries.
- Capital Gains Tax (CGT) Increase: The CGT rate for higher earners is set to rise to 24%, impacting profits from the sale of investments and properties. This change may influence investment strategies and the timing of asset disposals.
- Stamp Duty Surcharge on Additional Properties: The surcharge on second homes and buy-to-let properties will increase from 3% to 5%, raising the overall stamp duty liability for additional property purchases.
Implications for High-Net-Worth Individuals
These tax reforms are designed to increase government revenue by targeting wealth accumulation and investment returns. High net worth individuals may experience higher tax liabilities, which means it would be advisable for a reassessment of financial and estate planning strategies.
Strategic Considerations
- Estate Planning: With the inclusion of pensions in the IHT calculation from 2027, reviewing and potentially restructuring estate plans is advisable to mitigate tax exposure.
- Investment Timing: The impending CGT rate increase may prompt consideration of accelerating asset disposals to benefit from current rates.
Closing thoughts
The 2024 Autumn Budget introduced substantial tax changes that will affect individuals, particularly those with a high net worth.
Proactive financial planning is essential to navigate these developments effectively.
At Raymond James, Ribble Valley, we are committed to providing personalised advice to help you adapt to the evolving fiscal landscape.
With 2025 just around the corner, and these significant changes in the Autumn Budget now is the perfect time to re-evaluate your financial plans.
We are offering a no obligation consultation with one of our experienced Wealth Managers so get in touch today.
Risk warning: With investment, your capital is at risk. The information in this blog does not constitute advice or a recommendation and you should not make any investment decisions on the basis of it. If you do however require advice we will of course be happy to assist.