Budget 2024: What Labour’s Changes Mean For You
5 minute read
Date Published - October 31st 2024
5 minute read
Date Published - October 31st 2024
In Labour’s recent Autumn Budget announcement, several key changes have been introduced that directly affect property owners, investors, and estates.
With a focus on economic stability, these adjustments bring notable shifts in inheritance tax, capital gains tax, and stamp duty - especially for those planning to build a buy-to-let or second-home portfolio.
These updates signal important opportunities, as well as new considerations, for those navigating estate and property investment.
At GloverPriest, we’re here to help you understand these changes and make informed decisions for the future. If you'd like to know more about how the 2024 budget affects your inheritance tax planning or stamp duty, get in touch with our expert solicitors today.
The UK government has extended the inheritance tax (IHT) threshold freeze for an additional two years, keeping it in place until 2030. For many families, this means the inheritance tax-free allowance remains at £325,000, increasing to £500,000 if the estate includes a residence passing directly to children or grandchildren, and reaching up to £1 million for estates left to a surviving spouse or civil partner.
This freeze affects estate planning significantly, as rising asset values could lead to higher IHT liabilities.
Additionally, the chancellor announced that inherited pensions will be subject to inheritance tax from April 2027, closing what was described as a “loophole made even bigger when the lifetime allowance was abolished.”
The Chancellor of the Exchequer did not specify potential changes to the IHT threshold after 2030, but as the BBC’s Political Editor, Chris Mason, noted, “Rachel Reeves could have unfrozen the thresholds before 2028 and chose not to, and could later choose to maintain the freeze.”
Inheritance tax is a tax applied to the value of a person’s estate after they pass away, covering assets such as property, savings, and possessions. The current IHT threshold is set at £325,000, meaning estates valued above this amount may be subject to tax. Certain allowances, such as the residence nil-rate band for direct descendants, can reduce IHT liability, allowing up to £1 million to be passed tax-free to a surviving spouse or civil partner.
GloverPriest offers personalised guidance to help you manage inheritance tax liabilities and protect your estate. Our experienced solicitors will work with you to ensure your wishes are fulfilled, utilising all available allowances to maximise your tax efficiency. Get in touch with our specialist Inheritance Tax Planning solicitors for a secure future.
One of the more significant tax adjustments is the increase in Capital Gains Tax (CGT) for non-property assets, such as shares, company stakes, and valuable possessions. CGT applies when selling or gifting these types of assets but typically excludes primary residences, cars, and lottery winnings.
From 31st October 2024, the rate for higher-rate taxpayers will rise from 20% to 24%, while for basic-rate taxpayers, it increases from 10% to 18%. The annual CGT exemption is set at £3,000 for 2024/25, meaning any gains above this amount are taxable.
Gains from residential property remain taxed at 24% for higher-rate and 18% for basic-rate taxpayers.
Capital Gains Tax (CGT) is a tax applied to the profit made when selling or disposing of an asset that has increased in value. The tax is calculated on the difference between the asset's original purchase price and its sale price. For personal assets like shares, investments, or property not used as a primary residence, CGT can impact overall returns, with rates varying depending on income brackets and asset types. GloverPriest’s experts can help navigate these complexities to minimise tax liabilities effectively.
GloverPriest’s Wills, Trusts, LPA and Probate solicitors offer expert guidance on managing your estate efficiently.
From 31 October, the stamp duty surcharge on second homes and buy-to-let properties increases by an additional 5% on top of the existing rates. Now, second properties up to £250,000 face a combined rate of 5%, while those between £250,001 and £925,000 incur a 10% charge. For properties valued from £925,001 to £1.5 million, the surcharge rises to 15%, and for those over £1.5 million, it reaches 17%.
In her address to parliament on 30th October, Ms Reeves said this move will “support over 130,000 additional transactions from people buying their first home or moving home over the next five years.”
Buyers who exchanged contracts before 31 October 2024 are exempt from this increase.
Looking ahead, further changes to stamp duty will take effect from 1 April 2025, impacting virtually all buyers, including first-time buyers and home-movers. According to Money Saving Expert, the standard stamp duty threshold will drop from £250,000 to £125,000, and first-time buyer relief will lower from £425,000 to £300,000.
Stamp Duty, specifically Stamp Duty Land Tax (SDLT) in England and Northern Ireland, is a tax paid when purchasing property or land over a certain value. The rate of Stamp Duty varies based on property type, price, and whether it’s a primary residence or a second property. For buy-to-let and additional homes, higher surcharge rates apply. Understanding these costs is essential for anyone investing in property, and GloverPriest’s Conveyancing team can provide expert guidance on managing Stamp Duty obligations.
GloverPriest’s expert buy-to-let and conveyancing solicitors provide tailored support to help you navigate these changes, ensuring your transactions are efficient, legally sound, and optimised for your investment strategy. Explore our Conveyancing services for guidance on securing the best outcomes for your buy-to-let properties.
The government’s new commitment to invest £5 billion in housing is aimed at boosting affordability and supporting small developers. This plan will increase the Affordable Homes Programme to £3.1 billion and offer an additional £3 billion in support and guarantees for small housebuilders. For clients involved in property development, this injection of funds presents new opportunities within the housing market.
The 2024 UK Budget introduces substantial changes for property owners, investors, and those planning for the future. From the extension of the inheritance tax freeze and increased Capital Gains Tax to the raised Stamp Duty surcharge on buy-to-let properties, these updates create both challenges and new planning opportunities.
At GloverPriest, we’re dedicated to giving you the support and confidence you need to plan effectively amidst these changes. From protecting your assets through strategic inheritance tax planning to providing seamless conveyancing and Wills, Trusts, LPA and Probate services, our experienced solicitors will guide you through each process with clarity and professionalism.
We’re here to make your wishes a priority and provide you with peace of mind for the future. Get in touch today and let GloverPriest ensure your plans are secure and aligned with your values.
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