Albert Goodman reacts to Autumn Statement

30 October 2024

Albert Goodman’s team of experts give their reaction to the Autumn Statement:

On Non-dom status

Hannah Hopkins, Senior Manager, Personal Tax, Albert Goodman: “Non domiciled taxpayers should not be surprised by the changes in today’s budget.

“From an income tax perspective, the extension of temporary repatriation relief will allow clients more time to plan if they wish to remit funds to the UK at lower tax rates. This will be beneficial for many people to allow them to make investment and business decisions considering the changing global economies.

“The move to a residency based scheme is seem by some as a simplification of the rules and making it easier to follow the rules. Apart from the most wealthy taxpayers, the remittance basis has been a scheme only used for the first 7 years, after which the £30,000/£60,000 yearly charge made it unusable for most taxpayers.

“For clients that we work for across the South West this allows time for discussions around business and personal plans. Some are considering a move abroad but this may allow others the ability to spend additional time in the UK.”

 On CGT

Andrew Law,  Director, Corporate Tax, Albert Goodman: “From a political standpoint, it seems a logical step for the government to raise Capital Gains Tax so that there is less disparity between Capital Gains Tax and Income Tax. This adjustment answers some of the biggest questions facing Labour at the moment as to whether the wealthy are paying enough towards their tax liabilities.”

On IHT

Reme Holland, Partner and Chartered Financial Planner at Albert Goodman, said: “The introduction of inheritance tax on pensions, for those who die before they are 75, is a game changer, as many people’s pension funds are actually worth more than their property. Currently, 4 -5% of the UK population pay inheritance tax.

“With pensions now included in IHT, not only will that percentage jump, but this could really affect the ordinary person who’s worked hard building up a pension pot throughout their career.

“If they’ve paid of their mortgage like they were advised to do so and then sadly die before the age of 75, their pension and their property could easily be over the threshold, and their family could then be left with a huge tax bill.

“As the date of implementation of this policy is 2027, I expect that there will be details to thrash out and further consultation will be needed.

“For those people aged 75 and over, it’s important to still think of your pension as part of your income planning, not as a vehicle for IHT. Current advice has been to spend cash and spend your ISA money first, Now, people may want to start looking to gift some of these funds instead in order to hit the seven year period threshold where these gifts fall outside of your estate, because if you were banking on leaving money behind in a pension, the new rules may affect your ability to do so.”

On IHT in farming

Sam Kirkham, Partner, Farms and Estates, Albert Goodman: “Incredibly disappointed to hear that the government are driving ahead plans to reduce IHT reliefs for businesses from April 2026 without any consultation.

“The impact on the agricultural sector will be huge. A farm of say 500 acres, would need to find additional profits of approximately £120K a year, after income tax and national insurance, to fund the IHT bill over ten years, based on today’s HMRC interest rates which Rachel Reeves has also announced will increase.

“This measure will lead to the breaking up of farms and businesses who cannot afford to fund this kind of tax bill. For those that can afford it, it will reduce the investment that might be required in the business going forward, hampering growth.

“Overall this measure will reduce growth in the economy, investment in businesses and a reduction in UK food production alongside the likely negative impact on the environment.”