The Budget included headline-grabbing tax changes but others were buried in the fine print. What were they and how might they affect you?
Headlines. Undoubtedly the biggest changes announced in the Autumn Budget were those affecting employers’ NI, pensions and inheritance tax reliefs. We’ll cover these separately in dedicated articles, but here we’re looking at the some of small but no less important changes that you might have missed.
No change for HICBC. The high income child benefit charge (HICBC) has been contentious since it was introduced over ten years ago. One of the main criticisms is that it is inequitable. As its name suggests, the charge, which in effect claws back child benefit payments, is aimed at families with “high income”. The trouble is that it can hit families harder if only one parent has income compared with those where both parents do. In March 2024 the government announced that it would review the HICBC to make it fairer. In the Autumn Budget the Chancellor scrapped the review meaning that some families continue to face higher tax bills compared with those who have more income.
Savings and investments. The good news is that contrary to rumours you’ll continue to be entitled to invest in ISAs. The bad news is that the limit on the amount you can invest, currently £20,000 per tax year, is frozen until April 2030. Similarly, the annual investment limits for Junior ISAs will remain unchanged at £9,000 and for Lifetime ISAs at £4,000.
Investors’ relief. This relief was created to encourage business angels to invest in small companies, especially start-ups. The relief is given in the form of a lower rate of capital gains tax (CGT) when the investor sells their shares having owned them for at least three years. The relief was capped to £10 million of capital gains over the investor’s lifetime. The cap is reduced by 90% to £1 million with effect from 30 October 2024.
SDLT. There were well publicised changes to the stamp duty land tax (SDLT) rates for the purchase of second and subsequent homes, but one initially slipped under the radar. From 1 April 2025 the higher SDLT rate of 5% will apply to a property costing more than £125,000, compared to the current threshold of £250,000.
The reform of the high income child benefit charge to make it fairer has been scrapped. The cap on capital gains tax relief for business angels and other investors has been slashed by 90%. But ISAs are here to stay, albeit that the annual investment limit is frozen at £20,000 until 2030.
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