Understanding the Landscape
The UK Autumn Budget 2024 (delivered on 30 October 2024) introduced multiple tax reforms, many of which take effect from April 2025 or later. Key changes that will influence tax planning strategy include: employer National Insurance thresholds and rates; frozen thresholds for inheritance tax until 2030; higher Capital Gains Tax (CGT) rates; and reform of non-UK domicile (non-dom) status. (gov.uk)
Key Changes That Demand Planning
1. Capital Gains Tax (CGT)
- CGT main rates increased to 18% (basic) and 24% (higher) from 30 October 2024 for non-property assets. (gov.uk)
- Business Asset Disposal Relief (BADR) rate increased to 14% from 6 April 2025, and further to 18% from 6 April 2026. (gov.uk)
2. Inheritance Tax (IHT)
- Thresholds are frozen until April 2030, likely increasing the tax burden due to inflation. (gov.uk)
- From April 2027, inherited pension pots will be within IHT scope. Reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR) will kick in from April 2026. (gov.uk)
3. Non-UK Domiciled Regime
- The remittance basis is abolished from 6 April 2025 and replaced with a residence-based regime. Under it, new residents will only enjoy tax relief on foreign income and gains for their first four years. Offshore trusts used to shelter assets from IHT will generally be disallowed. (gov.uk)
- The planned 50% reduction for foreign income in the regime’s first year has been scrapped. (gov.uk)
4. Employer National Insurance & Employment Allowance
- Employer NIC rate increases from 13.8% to 15% from 6 April 2025. (gov.uk)
- Secondary Threshold drops from £9,100/year to £5,000/year — many more employers will be liable for NIC. (gov.uk)
- Employment Allowance increases from £5,000 to £10,500 and removes the £100,000 eligibility cap. (gov.uk)
Strategic Moves You Should Consider Now
| Strategy | Why It Matters | Example |
|---|---|---|
| Accelerate disposals | Lock in lower CGT (maybe before April 2025 when BADR rate rises again) | Selling qualifying business shares by March 2025 to benefit from 14% rate rather than the later 18% rate. |
| Review estate planning now | Frozen IHT thresholds and future inclusion of pensions mean shifting assets before accumulating taxable value | Transferring assets to trusts or making lifetime gifts before April 2026 changes to reliefs kick in. |
| Deal with non-dom status changes | Evaluate use of remittance vs residence-based regime before April 2025 | Non-doms should consider bringing income or gains into UK earlier, or reassessing offshore trust usage. |
| Payroll budgets should reflect NIC increases | Employer cost rises across all levels | A business hiring new staff will pay NIC on earnings above £5,000, pushing employment costs higher. |
Actionable Next Steps
- Run a tax impact model: Identify which of your income/gains assets might be subject to higher rates, and when reliefs will drop.
- Seek advice on carried interest: From April 2026, carried interest will be taxed as trading profits with Income Tax + Class 4 NIC, with a 72.5% multiplier. (gov.uk)
- Update your estate plan: Consider trust structures, gifts, and pension benefits ahead of IHT inclusion of inherited pensions.
- Review your tax residency status: Understand when you will fall under the new residence-based regime and what adjustments you need for foreign income and gains.
- Speak to payroll/accounting team now about NIC changes, software requirement, and impacts on cash flow.
If You're a Digital Nomad or Foreign Investor
- For those planning to relocate to the UK or arriving after time abroad, check how structuring foreign income rewards works under the new non-dom regime.
- Use the temporary repatriation facility, or consider timing of bringing offshore gains into charge before the regime kicks in. (gov.uk)
Bottom line: The Autumn Budget reforms are reshaping tax norms around residency, capital gains, inheritance, and employer obligations. By preparing now, individuals, investors, and businesses can avoid surprises and position themselves to benefit under the new rules.
Tax Planning Category TaxHome: UK Author: NomadicTax Research Team ReadTime: 7 min Published: true