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THE BUDGET – OCTOBER 2024
30th October 2024
5 minute read

I am sure that you will have followed the news closely in the last couple of days and there will be a lot of comment about the changes announced in the Budget. If you want to know more then please feel free to contact us.

As a firm of financial planners it is important to be up to date about any changes to our tax system and the biggest changes in the Budget are based on Employer National Insurance rates, Inheritance Tax and Capital Gains Tax.  National Insurance rates will indirectly affect the whole country but the other changes will impact different sections of our society.

INHERITANCE TAX

This is the one that I would like to highlight as this is the most important change for our clients and this means that some will have a need to make changes to their planning and even start spending their pension rather than using it mitigate Inheritance Tax (IHT).

GENERAL ALLOWANCES

The Inheritance Tax nil rate and residential rate bands of £325,000 and £175,000 respectively will be frozen at these levels until 2030. The nil rate band has been frozen at this level since 2009. The residence nil-rate band will continue to be tapered for estates over £2 million.

PENSIONS

The Chancellor also confirmed that ‘inherited pensions’ will be brought into Inheritance Tax from 6th April 2027, this “will restore the principle that pensions should not be a vehicle for the accumulation of capital sums for the purposes of inheritance, as was the case prior to the 2015 reforms.”

This is a big change and we will need to carefully consider how our advice will now change based on this considerable shift in the UK tax for pensions (Defined Contributions).

We look forward to talking to you about this and may contact you to revisit this subject ahead of your normal annual review meeting.

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