Autumn Budget: New Tax Measures and Their Impact on Businesses and Individuals

In the latest autumn budget by Chancellor Rachel Reeves, significant tax-raising measures were announced, shaking up the financial world in the United Kingdom. Among the measures is an increase in the stamp duty on second homes, a rise in national insurance contributions for employers, and the long-awaited increase in capital gains tax. These measures sparked lively discussions as many citizens are eager to understand how the budget might impact their personal finances. Sir Steve Webb, former Pensions Minister and now a partner at LCP, Dawn Register, Head of Tax Dispute Resolution at BDO, and Majid Hussain, Head of Private Clients at Haysmacintyre, addressed readers' key questions about the budget. In the area of inheritance tax, the 'unused' balance in defined contribution pension plans and certain death benefits will also be included in the assessment basis in the future. A significant change is that these changes will come into effect from 2027. The stamp duty for purchasing additional residential properties by individuals in England or Northern Ireland will rise from 3 percent to 5 percent effective from October 31, 2024. This also applies to the purchase of residential properties by companies, provided they are not subject to the single tax rate. The budget has also sparked debate about whether the UK's financial hub remains attractive to non-residents after the 'Domicile' rule is abolished from 2025. These changes and the associated potential inheritance tax liability for up to ten years could impact these individuals' long-term planning. In the area of taxation of unlisted corporate interests, questions arise about how these changes will affect the transfer of family businesses. These changes may lead to increased consideration of gifting company shares as part of estate planning.