The recent UK budget introduces £40 billion in tax hikes and changes to inheritance tax, capital gains and non-dom status, making effective financial organisation more crucial than ever. With new tax liabilities and relief limits, individuals and businesses alike must stay organised to manage these impacts effectively.
CGT rates have risen immediately, with the lower individual rate jumping from 10% to 18% and the higher rate from 20% to 24%. Business Asset Disposal Relief remains at 10% this year, but will rise to 14% in 2025 and 18% in 2026 for qualifying assets.
Staying strategic about asset disposal and tax-efficient investments will help manage these increased CGT liabilities.
The budget keeps inheritance tax (IHT) thresholds frozen, which, coupled with rising property values, is likely to push more estates above these limits. From 2027, inherited pensions will be subject to IHT, impacting beneficiaries who previously benefited from tax-free pension transfers. Additionally, caps on Business Property Relief (BPR) and Agricultural Property Relief (APR) mean only assets up to a specific value will qualify for full relief.
Estate planning is essential to manage these changes. Reviewing asset values, updating estate plans and considering options like trusts or lifetime gifting can help reduce future IHT burdens.
In April 2025, the UK will abolish “non-dom” status in favour of a residence-based tax system, meaning new tax implications for previously exempt individuals.
Those affected should carefully track income and assets within and outside the UK to ensure compliance and minimise tax obligations.
To manage the financial impacts of the budget, here are a few actions:
The UK budget’s tax changes underscore the need for proactive financial management. By staying organised, you can minimise immediate tax impacts and create a stable financial foundation for the future.
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