The Chancellor delivered her first Budget on 30 October 2024, with the tax announcements, summarised below.
Individuals
Capital Gains Tax
The rate of Capital Gains Tax will increase immediately from 30 October 2024. The main rate of capital gains tax increased from 10% to 18% for basic rate taxpayers, and from 20% to 24% for higher rate taxpayers.
For disposals of trading qualifying assets Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) will increase to 14% on 6 April 2025, and then to 18% from 6 April 2026. The lifetime amount of gains eligible for BADR remains at £1m
Inheritance Tax
The IHT nil rate band (currently £325,000) and residence nil rate band (£175,000) are to remain frozen until 2030.
Currently, pensions are excluded from IHT. From April 2027, any value left in your personal pension pot on your death will be included in your IHT estate and taxed in the usual way.
From 6 April 2026, the first £1m of a claim for Business Property Relief (BPR) and Agricultural Property Relief (APR) combined will continue to be exempt from IHT. However, claims for BPR and APR in excess of £1m will now attract relief at 50% giving an effective rate of IHT of 20%.
Income Tax
Income Tax allowances and rates remain unchanged for 2025-26 and it was annowed that the freeze on allowances and rates will end in April 2028.
Businesses
The rate of employer's National Insurance increases by 2% to 15% and the secondary threshold decreases to £5,000 from £9,100 from April 2025.
To attempt to ensure that smaller employers are not adversely affected the Employment Allowance will increase from £5,000 to £10,500.
The National Living Wage (NLW) will increase from 1 April 2025 by 6.7% to £12.21.
Other Announcements
VAT
From 1 January 2025, the VAT exemption on private school fees will be removed.
Stamp duty land tax
For transactions after 30 October 2024, there will be an increase in higher rates payable by purchasers of additional dwellings and companies from 3% to 5% above the standard residential rates.