Spring Budget 2024: Key Highlights
Posted by siteadmin on Thursday 14th of March 2024.
National Insurance Contribution Reductions
In a significant move, National Insurance contributions are set to decrease starting April 6th. Employed individuals will see their rate reduced from 10% to 8%, while self-employed individuals will witness a drop from 9% to 6%.
For someone earning £30,000 annually, this reduction translates to approximately an extra £350 in their pocket. Moreover, a 22-year-old investing this surplus in their pension could potentially boost their retirement fund by an impressive £40,000.
Changes to High-Income Child Benefit Charge
The threshold for the High-Income Child Benefit charge is undergoing a notable change, rising from £50,000 to £60,000. This adjustment is expected to benefit average earners, providing them with around £1,300 annually. Additionally, the upper threshold, where the benefit is fully lost, will be elevated to £80,000 (£60,000 in 2023/24).
Furthermore, this change opens avenues for families to navigate the charge by strategically reducing the adjusted net income of higher earners through pension contributions.
Individual Savings Accounts (ISAs) - Extra Investment in the UK
Exciting developments are underway for UK Individual Savings Accounts (ISAs). An additional allowance of £5,000 is set to supplement the existing £20,000 allowance. However, the exact nature of eligible investments is pending an HMRC consultation, encompassing shares, bonds, gilts, and investment funds. Stay tuned as the launch date is yet to be confirmed, with the consultation closing in early June 2024.
Moreover, considerations on transfers and the potential for opening multiple UK ISAs within the same tax year are under review. It's expected that restrictions on holding cash within the UK ISA will be imposed.
Mixed News for Landlords - Reduction in Higher Rate of Capital Gains Tax but Furnished Holiday Lettings Abolished
Starting April 6, 2024, the higher rate of Capital Gains Tax on residential property disposals will be slashed from 28% to 24%, benefiting UK individuals owning multiple residential properties. Meanwhile, the lower rate of 18% remains unchanged for gains within an individual's basic rate band.
However, the Furnished Holiday Lettings tax regime is scheduled for abolition from April 6, 2025. Landlords currently benefiting from this regime may need to reconsider their pension contributions and adjust their retirement income strategy accordingly.
In conclusion, these measures are designed to stimulate property supply for both sale and long-term rental, contributing to broader economic objectives.
Ready to take advantage of these changes and optimise your financial strategy? Contact us today on 0121 285 8525 or via www.whateleywm.co.uk to schedule a free consultation with our Advisers and ensure you're making the most of your opportunities.
This is for information only and should not be seen as advice or a recommendation to take action.
Disclaimer: All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and Her Majesty’s Revenue and Customs (HMRC) practice. Levels and bases of tax relief are subject to change.
The value of your investments can go down as well as up, so you could get back less than you invested.
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