Tag: general election 2024

Podcast: General Election 2024 – Labour’s tax policies

Posted on by Katie Trower

Whilst we wait for the Budget from the new Chancellor in the autumn, Katharine Arthur, Partner and Head of Private Client, James Walker, Partner and Duncan Cleary, Manager, discuss Labour’s tax policies and what this could mean for you.

Click to listen below. You can also listen on Apple Podcasts, Google Podcasts, and Spotify.

You can read more on our General Election tax policy round up below:

Labour Government tax policies

Posted on by Katie Trower

We focus here on the pledges made by the Labour Party in its manifesto.

For the details behind some of the headlines, we’ll have to wait for a Budget and publication of draft legislation, likely to be September at the earliest.

So, what do we know so far?

Personal taxes

Income Tax

  • No increases to the rates of Income Tax or National Insurance for the life of the next Parliament but the freezing of thresholds until 2028 has also been confirmed.

The non-UK domicile regime

  • Abolition of remittance basis of taxation for ‘non-doms’.
  • New residence-based regime: no UK tax on Foreign Income and Gains (FIG) for first four years of UK residence, provided taxpayer has been non-tax resident for the last 10 years.
  • Inheritance Tax (IHT): move to a residence-based regime from April 2025.
  • Non-UK situs assets will be subject to IHT if the owner has been UK tax resident for 10 years or more. This will remain the case for 10 years after ceasing to be UK tax resident (the 10-year tail).
  • Offshore trusts: new trusts and additions to existing trusts made by a non-UK domiciled settlor on, or after, 6 April 2025 will be subject to new residence-based rules. The protection from tax on non-UK source income and all capital gains arising within settlor-interested trust structures will no longer be available for non-UK domiciled individuals unless they qualify for the new four-year FIG regime.
  • Trusts: all assets held within a trust to be subject to IHT (subject to settlor being UK resident for 10 years).
  • Investment incentive during the four-year arrival window so that UK investment income is free of UK tax.
  • Further details:

Private equity

  • Increase rate of Capital Gains Tax (CGT) on carried interest to equal income tax rates or tax as income.

Inheritance Tax

  • No announcements, except for the non-UK domicile regime as above.

Capital Gains Tax

  • No announcements but no pledge not to increase rates.

Corporation Tax

  • Cap the main rate at 25%.

VAT

  • No increase to the rate of VAT.
  • Add VAT to school fees. You can read more here.

Manifesto

For full details, as published by the Labour Party, please see here.

Contact Katharine Arthur, Partner and Head of Private Client, if you wish to discuss how these proposed tax policies will affect you.

 

Labour’s 2024 Manifesto: Key changes to non-dom taxation and offshore trusts

Posted on by Katie Trower

There’s no surprise – it makes clear that the UK’s tax regime for non-doms will change, replaced by a “modern scheme for people genuinely in the country for a short period”. Most commentators expected the majority of the 2024 Spring Budget proposals put forward by the current Government to be adopted by the Labour Party, with perhaps some tweaks.

However, there are some firm commitments made in the Labour Manifesto, which were previously announced, but are now written down as commitments:

  • Labour will not introduce the proposed 50% discount for ‘foreign income’ in 2025/26; and
  • Most significantly, Labour will be bringing offshore trusts within the scope of Inheritance Tax (IHT) against current practice and the 2024 Spring Budget proposals.

It was the second of these that had caused most concern to many of the country’s wealthiest non-doms, who immediately began to seriously consider bringing forward their departure from the UK. However, depending on how the new rules are drafted, even leaving now may not prevent exposure to IHT for non-doms and their trusts, regardless of how closely linked to the UK they are.

For those who may be affected, our two articles for individuals and for those with offshore trust structures are now even more important than before (if that’s possible), especially for the trustees of potentially affected trust structures.

For further advice, please contact James Walker, Private Client Partner.

General Election 2024: What do we know about proposed tax changes?

Posted on by Katie Trower

Updated: 13/06/24

We focus here on the announcements made so far by the Conservative and Labour Parties, as included in their manifestos.

For the details behind some the headlines, we’ll have to wait for a Budget and publication of draft legislation, likely to be September at the earliest.

So, what do we know so far?

Personal taxes

Income Tax

  • Conservative and Labour: no increases to the rates of Income Tax or National Insurance for the life of the next Parliament but both parties have also confirmed the freezing of thresholds until 2028.
  • Conservative: a ‘triple lock plus’ for UK pensioners. Pensioners would benefit from a future increased personal tax allowance, in order to ensure the basic state pension does not become subject to Income Tax.
  • Conservative: the income threshold for the High Income Child Benefit Charge (HICBC) will double to £120,000.

The non-UK domicile regime

  • Conservative and Labour:
    • Abolition of remittance basis of taxation for ‘non-doms’.
    • New residence-based regime: no UK tax on Foreign Income and Gains (FIG) for first four years of UK residence, provided taxpayer has been non-tax resident for the last ten years.
    • Inheritance Tax (IHT): move to a residence-based regime from April 2025.
    • Non-UK situs assets will be subject to IHT if the owner has been UK tax resident for ten years or more. This will remain the case for 10 years after ceasing to be UK tax resident (the 10-year tail).
    • Offshore trusts: new trusts and additions to existing trusts made by a non-UK domiciled settlor on, or after, 6 April 2025 will be subject to new residence-based rules. The protection from tax on no-UK source income and all capital gains arising within settlor-interested trust structures will no longer be available for non-UK domiciled individuals unless they qualify for the new four-year FIG regime.
  • Conservative:
    • A temporary 50% exemption for the taxation of foreign income for the first year of the new regime.
    • Two-year Temporary Repatriation Facility (TRF) to bring previously accrued FIG into the UK at a tax rate of 12%.
    • Offshore trusts: trusts settled and funded before April 2025 by a non-UK domiciled settlor would have the ability to remain outside the scope of IHT regardless of the settlor’s status.
  • Labour:
    • Trusts: all assets held within a trust to be subject to IHT (subject to settlor being UK resident for 10 years).
    • Investment incentive during the four-year arrival window so that UK investment income is free of UK tax.
  • Further details:

National Insurance

  • Conservatives: 2% cut to the rate of employees’ National Insurance (NI) by April 2027 with plans to abolish employees’ NI in the longer term and to abolish the main rate of self-employed NI by the end of the next Parliament.

Private equity

  • Labour: increase rate of Capital Gains Tax (CGT) on carried interest to equal income tax rates or tax as income.

Inheritance Tax

  • No announcements, except for the non-UK domicile regime as above.

Stamp Duty Land Tax (SDLT)

  • Conservative:
    • £425,000 tax free threshold for first time buyers to be made permanent.
    • Introduce a new help to buy scheme to provide first time buyers with an equity loan of up to 20% of the cost of a new build home.
    • No changes to the rate.

Capital Gains Tax

  • Conservative:
    • Introduce a two-year temporary Capital Gains Tax relief for landlords who sell to their existing tenants.
    • No increase to the rate.

Pensions

  • Labour: re-introduce Lifetime Allowance for pensions, abolished in the March 2023 Budget. The Lifetime Allowance (£1.073m) was a limit on the total value an individual’s private pensions could reach before tax at up to 55% was levied on a pension withdrawal or on reaching age 75.
  • Conservative: a ‘triple lock plus’ for UK pensioners, as above.

Corporation Tax

  • Labour: Cap the main rate at 25%.
  • Conservative: No increase to the rate(s).

VAT

  • Conservative and Labour: no increase to the rate of VAT.
  • Labour: add VAT to school fees. You can read more here.

We will add further details as we receive them, together with a summary of actions you may wish to consider in advance of the General Election, or certainly the next Budget.

Manifestos

For full details, as published by the political parties, please see:

The SNP manifesto is still to follow.

Contact Katharine Arthur, Partner and Head of Private Client, if you wish to discuss how these proposed tax policies will affect you.

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