Pre October 2024 budget - possible planning options
It is unusual for a Chancellor to make tax changes in a budget and backdate these to take effect before the budget announcements are made.
When Rachel Reeves steps up to the dispatch box to present her first budget on 30th October, the likely dates from which any changes are effective will probably be:
· From the 30th of October 2024
· From April 2025
· Or some later date.
The comments we have made below are necessarily speculative, we unfortunately do not have a crystal ball, but they are based on informed commentary in recent months as our new government seeks to plug the hole in government finances and keep to its promise to avoid any changes to income tax, National Insurance and VAT.
If any of the points raised have relevance to your personal or business finances please call so we can help you consider planning options available to action before 30th October 2024.
Capital gains tax (CGT)
At present, CGT on chargeable asset disposals is charged at rates that are below income tax rates. It is possible that the budget will seek to tax these gains, perhaps from 30th October, at income tax rates.
There are also a number of CGT reliefs – including the Business Assets Disposal Relief which allows qualifying gains to be taxed at 10% - which are at risk of being withdrawn.
PLANNING ACTION: If you are considering the disposal of an asset you might be advised to consider acting before the budget date.
Inheritance Tax (IHT)
Likewise, the Chancellor may withdraw reliefs that presently exempt business assets from your estate.
She may also reduce or withdraw the option to make lifetime gifts and take advantage of the present Potentially Exempt Transfer rules that remove the value of the gift from the donor’s estate if following the gift they survive a further seven years.
PLANNING ACTION: Take advantage of the present IHT reliefs before the budget date.
If you have business colleagues, family or friends that you feel may benefit from this blog, please forward on as necessary. Please do get in touch if you want to consider your pre-budget planning options in more detail.
