The AA and threshold and adjusted income levels will remain the same for 2024/25. • As previously announced the LA of £1,073,100 will be abolished from 2024/25. Changes have been made to clarify the taxation of lump sums and lump sum death benefits, and the application of protections, as well as the tax treatment for overseas pensions, transitional arrangements, and reporting requirements. Individual Savings Accounts The government is freezing the limits on Individual Savings Accounts (ISAs) (£20,000), Junior Individual Savings Accounts (£9,000), Lifetime Individual Savings Accounts (£4,000 excluding government bonus) and Child Trust Funds (£9,000) for 2024/25.
will not be withdrawn in full until individuals have ‘adjusted net income’ of £80,000 or more. Comment The government estimates 485,000 families will gain an average of £1,260 towards the cost of raising their children in 2024/25. 170,000 families will be taken out of paying the tax charge. In addition, the government plans to administer the HICBC on a household rather than individual basis by April 2026, with a consultation in due course. Non-UK domiciled individuals From 6 April 2025, the current remittance basis of taxation for non-UK domiciled individuals will be abolished and replaced with a residence-based regime. Individuals who opt into the new regime will not pay UK tax on any foreign income and gains arising in their first four years of tax residence, provided they have been non-tax resident for the last ten years. Anyone who has been tax resident in the UK for more than four years will pay UK tax on their foreign income and gains. The government will also introduce the following transitional arrangements for existing non-UK domiciled individuals claiming the remittance basis: • an option to rebase the value of capital assets to 5 April 2019 • a temporary 50% exemption for the taxation of foreign income for the first year of the new regime (2025/26) • a two year Temporary Repatriation Facility to bring previously accrued foreign income and gains into the UK at a tax rate of 12%. The government will also reform Overseas Workday Relief for employment duties carried out overseas. Inheritance Tax (IHT) is currently a domicile-based system. The government announced the intention to move to a residence-based system, subject to consultation, but no changes to IHT will take effect before 6 April 2025.
The government announced that it is looking to introduce the UK ISA. This will have a new ISA allowance of £5,000 in addition to the existing ISA allowance, and will provide a new tax-free savings opportunity for people to invest in the UK. High Income Child Benefit Charge The High Income Child Benefit Charge (HICBC) is a tax charge that applies to higher earners who receive Child Benefit, or whose partner receives it. The government is increasing the income threshold at which HICBC starts to be charged from £50,000 to £60,000 from April 2024. The rate at which HICBC is charged will be halved from 1% of the Child Benefit payment for every additional £100 above the threshold to 1% for every £200. This means that Child Benefit
Personal Tax
Page 5
Made with FlippingBook Learn more on our blog