The Labour Government's first Budget delivered a range of significant tax changes, most taking effect from April 2025. We set out the principal measures affecting private clients.

Capital Gains Tax

CGT rates increased to 18% (basic rate) and 24% (higher rate) from 30 October 2024. Carried interest will be taxed at 32% from April 2025. Business Asset Disposal Relief and Investors' Relief remain capped at £1 million lifetime gains, with the rate rising from 10% to 14% in April 2025 and 18% from April 2026.

Inheritance Tax

The nil rate band remains frozen at £325,000 through April 2030. Agricultural and business property relief faces new restrictions from April 2026: the first £1 million of agricultural and business property continues to attract 100% relief, but assets above that threshold will attract only 50% relief. Unused pension pots will fall within the scope of IHT from April 2027.

Non-Domiciled Status

The domicile-based regime is replaced from April 2025. "Long-term UK resident" status — defined as 10 of the preceding 20 tax years — replaces deemed domicile as the relevant test for worldwide taxation. A new four-year foreign income and gains (FIG) regime applies to those arriving after at least 10 consecutive years of non-UK residence.

Stamp Duty Land Tax

The surcharge on second home purchases increased from 3% to 5% from October 2024. Non-residential property purchases by companies above £500,000 now attract a 17% rate.

Further detailed analysis of these changes will follow in due course. If you would like to discuss how any of these measures affect your position, please contact us.