Autumn Budget 2024 will take place on Wednesday, 30 October 2024. While the Labour Government's election manifesto stated there would be no increases to National Insurance or the rates of income tax, there have been no such commitments regarding income tax allowances or reliefs. Adjusting these allowances - such as reducing higher-rate tax relief for private pension contributions - could raise much-needed funds without breaking specific promises. The Government has also been relatively quiet on capital gains tax (CGT) and inheritance tax (IHT), leading to speculation that these areas might be targeted in the forthcoming Budget.
We can't predict what the Budget will hold, therefore, any actions taken now should be carefully considered and aligned with your existing financial plans. It's important that tax considerations, particularly based on press speculation, don't override sound commercial decisions. If you've been contemplating certain transactions or financial moves, there may still be time to act before the Budget to benefit from current tax provisions.
Possible Actions to Consider Before the Budget:
Disposing of Assets: Selling or gifting assets such as property or shares to realise a capital gain under the current tax regime.
Members’ Voluntary Liquidation Distributions: Making distributions that may be subject to CGT, potentially benefiting from existing rates.
CGT Elections on Share Transactions: Opting to pay CGT upfront where share-for-share transactions have occurred since 6 April 2022.
Capital Distributions from Overseas Trusts: Considering distributions that could be more tax-efficient if made before potential changes.
Inheritance Tax Planning: Making gifts to utilise IHT exemptions and allowances, such as the annual exemption, business relief, and agricultural property relief.
Pension Contributions: Making personal pension contributions or taking the pension tax-free lump sum using current allowances.
ISA Allowance: Maximising this year's ISA allowance to benefit from tax-free growth.
Important Reminder:
Before implementing any tax planning strategies, it's essential to seek advice from a qualified professional. Actions should be tailored to your personal circumstances and long-term objectives.
Upcoming Support from Dains:
We will provide our summary and commentary on the Budget announcements following the Chancellor’s statement on 30 October. Additionally, we're hosting our annual Budget breakfast seminars the morning after the Budget, where we'll delve into the key changes and their implications for you and your business.
Join us at one of our face-to-face events in Stoke or Birmingham or participate via our live webinar. Further details are available here.
We will also be running a “Wealth Maximisation Workshop: Capitalising on Post-Budget Opportunities” with Barclays on 12 November in Birmingham. For more information on how to register for this, please email Sarah Laing.
If you'd like to discuss any tax planning opportunities before or after the Budget, please get in touch with our tax team on 0845 555 8844.
For more insights on the potential changes to CGT affecting business owners, read Mark Tuckwell’s article, “Proposed changes to capital gains tax – how painful could it be?”