The recent UK Autumn Budget 2024 introduces some significant tax adjustments, especially relevant to high-net-worth (HNW) individuals, expatriates, and UK-based beneficiaries.
While the budget addresses a broad spectrum of financial areas, in this article we’re focusing on those that have the most impact on personal taxes, pensions, capital gains tax (CGT), and inheritance tax (IHT). All areas we believe will be of interest to our network, clients and regular readers.
These changes may prompt individuals to consider asset restructuring or relocating abroad to safeguard their wealth, with considerable implications for financial planning.
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Pensions will also now be subject to IHT, classifying them within an individual’s estate and impacting UK-based beneficiaries with a combined potential tax burden of 40% IHT and 45% income tax on inheritance transfers.
The UK Autumn budget 2024 has essentially introduced a 25% tax charge on QROPS, reducing their appeal for expats and spelling the end of this advantageous pension transfer vehicle for some in specific situations. However, international SIPPs remain available as a strong alternative for retirement planning abroad.
CGT rates now stand at a universal 18% for lower earners and 24% for higher earners, applying equally to both shares and property. This rate consolidation increases the tax burden on investments and property disposals, prompting a need to reassess capital gains strategies, particularly for HNW portfolios.
The nil-rate band remains frozen until 2030, with substantial changes to business and agricultural property relief effective from April 2026, now capped at £1 million.
Because pensions will be included in estates, it further underlines the need for efficient IHT planning to ensure wealth preservation.
The Autumn budget announced the replacement of the concept of domicile with a residency test, altering the tax landscape for international income and assets in a substantial way.
Non-domiciled individuals, especially those living abroad, may need to review their residency status to better align with these new tax obligations.
With pensions and estates facing heightened IHT liabilities, robust financial planning should be considered an essential in your wealth management plans now more than ever.
Those interested in preserving their wealth may benefit from a review from one of our wealth managers and using favourable international regimes like Non-Habitual Residency to protect their assets and financial goals.
Higher CGT rates call for a refreshed approach to investments, focusing on efficient diversification and timing to optimise tax outcomes.
For clients with ongoing QROPS considerations, immediate reassessment is essential. Alternatives such as international SIPPs and QNUPS (Qualifying Non-UK Pension Schemes) remain viable. Transferring pension assets strategically can also mitigate IHT and income tax impacts.
Get in touch with a Private Client Consultancy advisor today to find out more.
The UK Autumn budget 2024 brings significant challenges for HNW individuals, expats, and IFAs, tightening tax regulations that necessitate proactive wealth management.
At Private Client Consultancy, we are prepared to guide you through these changes, with a focus on wealth protection, tax efficiency, and tailored strategies to navigate this shifting fiscal landscape and provide you with wealth management with peace of mind.
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