SailWealth Highlights from the Autumn Budget 2024
SailWealth is committed to delivering clarity amidst complexity for wealth managers and financial professionals. The Autumn Budget 2024 introduces sweeping changes across employment rights, taxation, pensions, property investments, and sustainability initiatives. Below is a comprehensive breakdown of these pivotal reforms and their implications for the financial services landscape.
Employment Reforms and Taxation Adjustments
National Minimum Wage (NMW)
From April 2025, minimum wage increases will impact multiple age brackets:
- For workers aged 21 and over, the rate rises to £12.21 per hour, a 6.7% increase equivalent to an annual uplift of £1,506.
- Younger workers (18-20) and apprentices will see even steeper hikes of 16.3% and 18%, respectively.
These changes underscore the government’s focus on addressing cost-of-living concerns, with implications for labor-intensive sectors and payroll strategies.
Employers' National Insurance Contributions (NICs)
Significant changes to NICs will take effect in April 2025:
- Employer NICs will rise to 15%, up from the current 13.8%, representing an increased burden for businesses.
- The secondary threshold will drop to £5,000 (from £9,100), exposing more of the payroll to NIC liabilities.
- Encouragingly, the employment allowance will double to £10,500, a boon for small and medium enterprises (SMEs) looking to manage costs.
Statutory Sick Pay (SSP)
The SSP framework has been overhauled to enhance accessibility and fairness:
- Waiting days have been abolished, and SSP will now be payable from day one of sickness.
- The weekly rate is set at £116.75 or 90% of earnings, making it universally applicable by removing the earnings threshold.
These measures aim to protect lower-income workers, though they may increase short-term costs for employers.
Inheritance Tax (IHT) and Capital Gains Tax (CGT) Reforms
Capital Gains Tax (CGT)
Starting from October 30, 2024, CGT rates will rise substantially:
- Basic-rate taxpayers face an increase to 18%, while higher-rate taxpayers, trustees, and personal representatives will be subject to a new 24% rate (up from 20%).
- Anti-forestalling rules will target pre-emptive actions, such as contract timing, to ensure compliance with the new framework.
Inheritance Tax (IHT)
From 2027, unused pension funds and death benefits from discretionary schemes will be considered part of the deceased’s estate, aligning their treatment with non-discretionary schemes. Key points include:
- The nil-rate band of £325,000 and the residence nil-rate band of £175,000 remain frozen until 2030, extending fiscal drag.
- Relief adjustments will limit the 100% Agricultural Property Relief (APR) rate to the first £1 million, with a 50% rate on balances beyond this threshold.
These changes reflect an ongoing effort to modernize tax treatments and close loopholes, with significant implications for estate planning.
Property Market and Stamp Duty
Stamp Duty Land Tax (SDLT)
The government has introduced substantial adjustments to SDLT:
- The surcharge for additional dwellings will increase from 3% to 5%.
- For non-natural persons purchasing high-value residential property, the rate rises to 17%.
- From April 2025, the SDLT relief for first-time buyers will revert to pre-2022 levels, reducing incentives for those purchasing properties over £500,000.
Annual Tax on Enveloped Dwellings (ATED)
Starting April 2025, annual charges for properties valued over £20 million will rise to £292,350. The inclusion of alternative financing arrangements further equalizes tax treatments for companies and individuals.
Pension Reforms
Overseas Transfers and Contributions
The abolition of the EEA exclusion from the 25% Overseas Transfer Charge (OTC) marks a pivotal shift, applying to transfers initiated after Budget Day (October 30, 2024).
- Employers can continue to contribute NIC-free, while individual pension contribution allowances remain unchanged.
Environmental and Sustainable Investments
The extension of APR to land managed under environmental agreements highlights the government’s push toward sustainability. From April 2026, relief rates for qualifying business properties will be reduced to 50%, barring the first £1 million.
Business and R&D Focus
Corporation Tax (CT)
The headline CT rate remains steady at 25%, ensuring international competitiveness while maintaining stability. Additional initiatives include:
- A commitment to full capital expensing through 2026.
- Enhanced R&D support for SMEs, alongside administrative streamlining to promote innovation.
Carried Interest
From April 2026, carried interest income will be taxed as trading profits, with a unified 32% rate in 2025–26 transitioning to a 72.5% multiplier for higher earners.
Why This Matters
These sweeping reforms present both challenges and opportunities for wealth managers, financial professionals, and their clients. Rising taxes, changes in relief frameworks, and an emphasis on environmental investment strategies require proactive portfolio adjustments and strategic planning. SailWealth is dedicated to empowering our clients by decoding these complexities and providing actionable insights to help them navigate the evolving landscape with confidence.
Stay Ahead with SailWealth
As experts in financial services distribution, SailWealth offers bespoke solutions tailored to the needs of sophisticated investors and wealth managers. Contact us at info@sailwealth.co.uk or visit our website for more insights on how we can help you adapt to the changing regulatory environment.
SailWealth Ltd is an Appointed Representative of Capital Systematics Ltd which is authorised and regulated by the Financial Conduct Authority.
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