Budget 2024: Key Changes and What They Mean for You

Autumn Budget 2024: Key Changes for Financial Planning

The Chancellor recently delivered the Autumn Budget 2024, introducing several significant changes that may impact your financial planning. As your trusted financial advisers, we want to keep you informed about the most relevant updates and how they might affect you.

Capital Gains Tax Increases

One of the most notable changes is the increase in Capital Gains Tax (CGT) rates. From 30 October 2024:

– The basic rate of CGT will rise from 10% to 18%
– The higher rate will increase from 20% to 24%

These changes make tax-efficient investing even more crucial. Maximising your ISA and pension contributions can help shelter your investments from CGT. For those with additional funds to invest, we may need to review your investment strategy to ensure it remains tax-efficient.

Inheritance Tax Changes

While the inheritance tax nil-rate bands will remain frozen until April 2030, there are significant changes coming:

– From 6 April 2027, unused pension funds and death benefits from pensions will be included in your estate for inheritance tax purposes.
– A new £1 million allowance will apply to the combined value of property qualifying for 100% business property relief and agricultural property relief from 6 April 2026.

These changes may require us to revisit your estate planning strategy, especially if you have substantial pension savings or business/agricultural assets.

Pensions and Retirement Planning

The State Pension Triple Lock will be maintained, with the basic and new State Pension increasing by 4.1% from April 2025. However, the inclusion of pension funds in inheritance tax calculations from 2027 may affect how we approach your retirement planning.

National Insurance Contributions

Employers will see an increase in their National Insurance contributions from 13.8% to 15% starting 6 April 2025. This change primarily affects business owners and may influence decisions around remuneration structures.

What This Means for You

These changes underscore the importance of regular financial reviews and proactive planning. Depending on your personal circumstances, we may need to adjust your financial strategy to:

1. Optimise your investment approach in light of the CGT changes
2. Review your estate planning, especially regarding pensions and business assets
3. Reassess your retirement income strategy
4. For business owners, consider the most tax-efficient ways to draw income

Next Steps

As always, we’re here to help you navigate these changes and ensure your financial plan remains aligned with your goals. If you have any questions or concerns about how the Autumn Budget might affect you, please don’t hesitate to reach out. We recommend scheduling a review meeting to discuss your personal situation in more detail.

Remember, financial planning is an ongoing process, and staying informed and adaptable is key to long-term success. We look forward to helping you make the most of your finances in light of these new developments.

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