Budget 2024 summary
1. Capital Gains Tax (CGT): Effective 30 October 2024, CGT rates increased:
- Lower rate: 18% (up from 10%) for combined income and gains under £50,270.
- Higher rate: 24% (up from 20%) where combined income and gains over this threshold.
- The favourable CGT rate available on business sales (such as Lloyd’s Corporate Members) under Business Asset Disposal Relief, will increase. The rate will be 14% in 2025/26 and 18% from 2026/27.
2. Inheritance Tax (IHT): From 6 April 2026, changes affect Business and Agricultural Relief:
- The first £1 million in qualifying assets remains fully exempt.
- For amounts above £1 million, 50% is exempt, with the remaining value taxed at up to 40%, creating an effective IHT rate of 20% on applicable assets over £1 million.
- AIM-listed shares now have an effective IHT rate of 20%, while Lloyd’s underwriting can still maintain full relief on the first £1 million.
3. Income Tax: No new changes; thresholds will unfreeze post-2027/28.
4. Corporation Tax: The maximum rate remains at 25% for large companies, with small companies taxed at 19%.
5. National Insurance: Employer’s rate increased to 15%, with the income threshold lowered to £5,000. However, Employer’s National Insurance does not affect Unlimited Members, partnership income for LLP Members or dividend payments from Namecos.
These updates reflect targeted increases in specific tax areas, focusing on capital providers to Lloyd’s and the Corporate vehicles.
Should you have further questions, we are happy to help.
This article does not constitute individual tax advice and you should seek your own tax advice as necessary.