Anticipating Tax Changes: A Sneak Peek into the Autumn Budget 2024

Rt Hon Rachel Reeves announced an Autumn Budget will take place on Wednesday, 30th October 2024.

In this article, Ashley Stoller, Private Client Tax Manager, reviews the proposed changes to non-doms that could end excluded property trusts, affecting long-term UK residents.

It has strongly suggested that tax increases are on the horizon in the autumn budget, emphasising the need for honesty regarding the challenging decisions that need to be made. There is speculation that Labour may target other taxes, such as capital gains and inheritance.

The HM Treasury policy paper on the proposed changes to non-doms broadly aligns with expectations, including reversing the conservative proposal for a 50% reduction in foreign income and gains subject to tax for the first year. Notably, there is a plan to end excluded property trusts, with the government acknowledging the need for appropriate adjustment of existing trust arrangements to ensure consistent treatment of all long-term residents in the UK for inheritance tax purposes.

“The government recognises that trusts will already have been established and structured to reflect the current rules, so is considering how these changes can be introduced in a manner that allows for appropriate adjustment of existing trust arrangements while ensuring that the treatment of all long-term residents of the UK is the same for IHT purposes.”

Additionally, the proposal suggests the potential for a temporary lower tax rate for cleaning up all undistributed income and gains from offshore structures as part of the TRF, though details are currently limited. It is disappointing that there will not be a formal consultation on transitioning to a residence-based system for inheritance tax. However, we remain hopeful that the pre-election engagement sessions have produced positive outcomes.

Follow our updates on the Autumn Budget and further clarity on these proposals via our social channels using the hashtag #AutumnBudget2024.