Autumn Budget 2024: key points at a glance: The UK Budget is that occasion each year (and sometimes twice in a year) when the UK government outlines the extra money it needs and how it is going to spend it. Changes to the tax rules are what interest us here. The Budget of 30th October 2024 included a lot of tax changes – some quite big in effect, and we are not going to recount them all here. This article outlines the changes most likely to affect the owners of UK investment property, and within each subject, only deals with aspects directly impacting landlords.
Published 15th November 2024
The UK Budget is that occasion each year (and sometimes twice in a year) when the UK government outlines the extra money it needs and how it is going to spend it
Changes to the tax rules are what interest us here
The Budget of 30th October 2024 included a lot of tax changes—some quite big in effect, and we are not going to recount them all here. This article outlines the changes most likely to affect the owners of UK investment property, and within each subject, only deals with aspects directly impacting landlords.
Income Tax (IT)
On 5th April April 2025, the non-domicile regime comes to an end. The replacement for the non-domicile regime will be a residence-based test, which allows individuals relocating to the UK to be taxed only on their UK source income and gains for the first four tax years, with no UK tax on any Foreign Income and Gains (FIG) arising in those years, even if brought to the UK.
Key points
- To be within this four-year Foreign Income and Gains (FIG) regime, individuals must be within their first four tax years of UK residence, following a period of 10 tax years consecutive non-UK residence.
- The amount of overseas income for which exemption is claimed must be disclosed.
- A transitional arrangement called a Temporary Repatriation Facility (TRF) will be available for those who have previously taken advantage of the non-domiciled rules.
- Overseas workday relief (OWR) will be available to exempt from UK tax the overseas earnings of a UK resident eligible for the FIG treatment for the first four years after arriving in the UK.
Capital Gains Tax (CGT)
Gains on disposals made on or after 30th October 2024 will be subject to either 18% or 24% CGT. As previously, the amount taxed at 18% will be equal to the unused amount of the basic rate tax band. The rest of the gain will be taxed at 24%.
Key points
- A transitional arrangement applies to those previously treated as non-domiciled, allowing them to rebase the cost to the value as of 5th April 2017.
- Business Asset Disposal Relief (BADR) rate will increase from 10% to 14% from 6th April 2025. The limit on gains that may enjoy the BADR lower rate of CGT is £1 million.
Furnished Holiday Lettings (FHL)
With effect from 6th April 2025 for Income Tax (1st April 2025 for Corporation tax) the FHL regime is abolished. All former FHL lettings will be treated the same as any other lettings business and be treated as part of a UK letting business or overseas letting business.
Key points
- Former FHL will no longer enjoy the full deduction for loan interest paid, but will suffer the same restriction as other lettings businesses (except where held by a company).
- Income from former FHLs will no longer be pensionable income.
- Losses made in an FHL will be available to be carried forward.
- Capital Allowances on the initial supply of furnishings and equipment will no longer be available, but writing down allowance in respect of purchases made before 6th April 2025 will continue to be allowed until exhausted.
- See also BADR (CGT, above) for treatment of disposals.
- None of the changes make any change to the VAT position.
Stamp Duty Land Tax (SDLT)
The SDLT rates have changed with effect from 31st October 2024. The 0% threshold will lower with effect from 1st April 2025.
More detailed tables are available for individuals and for companies.
Inheritance Tax (IHT)
With effect from 6th April 2025 non-UK assets will be subject to IHT where the deceased was resident in the UK for at least ten years out of the last twenty before the chargeable event (including death). The timescales will be shortened where the individual has been UK resident for less than twenty years.
UK assets remain subject to IHT regardless of residence.
Annual Tax on Enveloped Dwellings (ATED)
The rates have increased by about 1.7%.
These notes provide guidance to the topics most commonly of interest to our clients. They are intended to give a prompt to contact us for detailed advice if any of these topics could be of relevance. It is not a complete list of the budget changes, nor does it provide the detail you will need for decision making on any topic.
Contact us now to discuss your specific requirements
Autumn Budget 2024: key points at a glance: The UK Budget is that occasion each year (and sometimes twice in a year) when the UK government outlines the extra money it needs and how it is going to spend it. Changes to the tax rules are what interest us here. The Budget of 30th October 2024 included a lot of tax changes – some quite big in effect, and we are not going to recount them all here. This article outlines the changes most likely to affect the owners of UK investment property, and within each subject, only deals with aspects directly impacting landlords.
Autumn Budget 2024: key points at a glance: The UK Budget is that occasion each year (and sometimes twice in a year) when the UK government outlines the extra money it needs and how it is going to spend it. Changes to the tax rules are what interest us here. The Budget of 30th October 2024 included a lot of tax changes – some quite big in effect, and we are not going to recount them all here. This article outlines the changes most likely to affect the owners of UK investment property, and within each subject, only deals with aspects directly impacting landlords.
Autumn Budget 2024: key points at a glance: The UK Budget is that occasion each year (and sometimes twice in a year) when the UK government outlines the extra money it needs and how it is going to spend it. Changes to the tax rules are what interest us here. The Budget of 30th October 2024 included a lot of tax changes – some quite big in effect, and we are not going to recount them all here. This article outlines the changes most likely to affect the owners of UK investment property, and within each subject, only deals with aspects directly impacting landlords.
The information contained in this article is believed to be correct at the time of publication. The content of this article is intended to be a brief summary of the principal points of the legislation or proposed legislation only, and it is provided for general guidance only. It may not take into account subsequent changes in the law and of necessity it omits much detail. Taxation is a complicated subject and is subject to change. You should only rely on advice prepared specifically for you. Neither the writer nor Landlords Tax Services Ltd can be held liable for any loss arising from any act or omission by you as a result of your understanding of this article. If the subject matter is of interest you should contact us to see if there is a relevant update, and to take professional advice which takes into account your circumstances.