The Spring Budget

The Spring Budget 2024 – What does it mean for you?

Yesterday, Rt Hon Jeremy Hunt MP announced his financial update for the Spring Budget. Here are the key highlights:

  • National insurance: Hunt announces a decrease in the national insurance contribution rate from 10% to 8% starting in April.
  • Growth: Hunt predicts the economy will expand by 0.8% this year and 1.9% in 2025.
  • Inflation: Expected to drop below the government’s 2% target.
  • Government borrowing: Hunt reveals that excluding Bank of England debt, underlying debt will be 91.7% of GDP in 2024-25, then 92.8%, 93.2%, and 93.2%, before decreasing to 92.9% in 2028-29. He highlights that the UK’s government debt is the second lowest among G7 countries, lower than Japan, France, or the US.
  • Non-dom tax status: The chancellor confirms the abolition of non-dom tax status, to be replaced by a “modern, simpler, and fairer” system starting in April 2025.
  • Property tax: Hunt announces a reduction in the higher rate of property Capital Gains Tax (CGT)  from 28% to 24%.
  • Savings: Hunt introduces a new “British Isa,” granting investors an additional £5,000 tax-free allowance to promote investment in UK assets.

Read below to see what Managing Partner, Stuart Ritchie, had to say about these changes.

The Spring Budget

Income Tax

No changes were announced regarding Income Tax. Instead, the government introduced targeted relief for working people. All tax bands stay the same, and savers who use the starting rate for savings will still have the £5,000 limit until April 2025.

Capital Gains Tax

The government lowered the extra tax you pay when selling a house to encourage sales. For those paying CGT at the higher rate, the surcharge for residential property went down from 8% to 4%. But for basic rate taxpayers, it stays at 8%. So, starting April 2024, the CGT rates for selling homes will be 18% for the basic rate and 24% for the higher rate.

  • This will also affect expats, as they are liable to CGT when selling property in the UK following a change in rules in 2015

Inheritance Tax (IHT)

The government has revealed its plans to transition to a residence-based system for Inheritance Tax (IHT), shifting away from the current domicile-based assessment. A consultation on this change is anticipated soon. It’s important to note that any alterations to IHT regulations won’t come into effect until after 6th April 2025.

This significant transition, particularly for non-domiciled individuals, marks a departure from the traditional domicile-centric approach to one focused on residency.

Non-Domicile Abolished

The UK government has announced the abolition of the non-domiciled (non-dom) tax status for individuals residing in the UK but registered as living overseas for tax purposes. This change will take effect from April 6, 2025, replacing the previous system with a new residency-based regime ‘a modern, simple and fairer residency-based system. Under the new regime, individuals residing in the UK for more than four years will be subject to UK tax on their foreign income and gains, aligning them with other UK residents.

Transitional arrangements will include a capital asset value rebasing option and a temporary 50% exemption for the taxation of foreign income in the first year of the new regime. Additionally, a Temporary Repatriation Facility will be offered for individuals with previously taxed foreign income and gains. 

  • From April 6, 2025, a residence-based regime will be introduced, exempting individuals from UK tax on foreign income and gains in their first four years of tax residence, provided they have been non-tax residents for the last ten years. Eligible employees will also have the opportunity to claim Overseas Workday Relief for income from employment duties carried out overseas during their first three years of tax residence. These changes are estimated to generate £2.7 billion in revenue by the year 2028-29.

Excluded Property Trusts

To offer assurance to impacted taxpayers, the treatment of non-UK assets settled into a trust by a non-UK domiciled settlor before April 2025 will not be altered. Consequently, these assets will remain outside the purview of the UK IHT regime.

National Insurance (NI)

Confirming previous speculation, the government is indeed implementing a reduction in the main rate of employee National Insurance (NI) by 2 percentage points, from 10% to 8%, effective from April 6, 2024. 

  • Additionally, the government will reduce the main rate of self-employed National Insurance by a further 2 percentage points. Consequently, starting April 6, 2024, the main rate of Class 4 NICs for self-employed individuals will be reduced from 9% to 6%.

Individual Savings Account (ISA)

The government is preparing to unveil a new ISA known as the UK ISA, featuring a distinct £5,000 allowance separate from the existing £20,000 allowance.

Before finalising the specifics, the government aims to gather public input and conduct consultations on this new ISA. These consultations are anticipated to occur before June.


Hunt confirmed reforms to Defined Contribution workplace pensions, aiming to boost UK business investment. These reforms, announced in March, include:

  • Requiring pension schemes to disclose UK vs. overseas investments.
  • Mandating performance comparison using the Value for Money framework.
  • Granting new powers to regulators to prevent underperforming schemes from taking on new business, aiming for market consolidation.

The government plans to implement these changes promptly, with investment disclosure due by 2027. No pension taxation changes were announced in the budget

Other Changes

Abolition of Furnished Holiday Lettings Tax Regime (FHL).

The main advantage of FHL over buy-to-let is that landlords are able to deduct the full cost of the mortgage interest payments from the rental income they make, reducing their tax bill, as well as paying lower CGT when they sell. Scrapping FHL is expected to save the Treasury around 245M GBP a year.

Get in touch

Contact GSB today if you would like to discuss any of these matters with our in-house team.


The views and opinions expressed should not be construed as investment or financial advice. The information contained is for educational purposes only.

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