Spring Budget 2024: What it means for you

Chancellor of the Exchequer, Jeremy Hunt, has recently delivered his second full Budget. Given that this will be one of the last set piece opportunities to convince the electorate that his party will make them better off, tax cuts were widely anticipated and, to some degree, delivered. In the immediate aftermath of the Budget speech there is limited detail available, but we will be watching the announcements in the next few weeks and will update clients as relevant details emerge. In the meantime, here is our initial take on the Budget tax measures as they affect our clients.

Property taxes

Following concerns from various rural and coastal communities, Jeremy Hunt has abolished the Furnished Holiday Lettings tax regime. Originally introduced to assist the British tourism economy, properties which qualified as furnished holiday lets have had a number of tax advantages by comparison with standard buy-to-let investments. Significantly, furnished holiday lets were excluded from the restriction on deductibility of finance costs from rental income which affects general investment property.

Like normal buy to lets, those with furnished holiday lets can now expect to pay tax on their gross rental profits, with a deduction of 20% of the finance charges against the tax rather than a reduction of the profit. As highly geared buy-to-let investors have found, this can push the rental business from profitability to losses. The full impact of the changes has yet to be announced but will take effect from April 2025.

The context for the change is, firstly, the pressure from tourist areas, especially in the West Country, for measures to stop the short-term lettings market from undermining the provision of housing for locals. The thinking is that this has been driven, at least in part, by the disparity between the tax treatment of general property investment versus furnished holiday lets, which has encouraged a move away from long-term lets into short-term ones. It remains to be seen whether this levelling of the playing field will deliver more rural housing, but in the meantime it could affect estate and farming clients who have diversified into provision of holiday accommodation.

On capital gains, Jeremy Hunt has reduced the upper rate of capital gains tax currently paid on property sales from 28% to 24%. The aim is to encourage second and investment property owners to sell up and deliver more housing onto the market. The lower rate of 18% paid by basic rate taxpayers on property transactions will remain the same. Most residential property disposals are covered by main residence relief, so this will do nothing to encourage downsizers who may have been hoping for some sort of stamp duty land tax relief.

Stamp duty land tax relief did feature in the Budget speech, but only to abolish multiple dwellings relief where a lower rate of duty is paid on purchases of several properties in a single transaction. Property developers may be affected, although contracts exchanged before Budget day are protected as are any transactions that complete pre 1 June 2024.


Most of the noise around the taxation of non-domiciled people has come from the opposition rather than the Conservatives, although George Osborne had a go at limiting the scope of the available exemptions in 2017, and in doing so closed down the indefinite tax advantages which many had enjoyed previously.

Jeremy Hunt is going further. His measure abolishes the remittance basis of taxation under which non-UK domiciles can keep offshore income outside the UK tax net. Instead he proposes a simpler regime based on residence, rather than the arguably opaque legal concept of domicile. Individuals who opt into the new regime will not pay UK tax on any foreign income and gains arising in their first four years of tax residence, provided they have been non-tax resident for the last 10 years. This new regime will commence on 6 April 2025 and applies UK wide. Transitional provisions will apply, in particular to encourage current non-doms to repatriate capital at a reduced tax rate and allowing for rebasing of overseas assets to market value at 5 April 2019.

Jeremy Hunt’s approach may well take the fire out of Labour’s plans to abolish non-dom status, but he seems to have steered a course between removal of the perceived anomalous status of non-doms and maintaining a tax system with enough benefits to attract high net worth contributors to the economy. It could also encourage those who have been long-term non-residents to return.

Inheritance tax

Unmentioned in the Chancellor’s speech, but in among the HMRC website documents, was a proposal to move to a residence-based regime for inheritance tax. This would contrast with the present system which depends on the legal concept of domicile until a person has been tax resident for 15 years. It would involve a wholesale review of the present IHT regime, so is unlikely to happen soon, but, whereas the income tax measures might encourage UK domiciled returners to the UK, an IHT system based on residence might prompt them to stay offshore. Others looking to mitigate their IHT liabilities might want to join them.

Making work pay

The much trumpeted 2% cut to National Insurance Contributions was announced. It’s not clear how much working people actually appreciate the benefits of this cut; apparently the 2% cut announced in the autumn had no impact on polls. However, doubling down on it may make a meaningful difference to workers’ pay packets where the original 2% did not. It also restricts the benefits to working age people as anyone above state pension age is not liable to pay contributions. Neither are contributions due on investment or property income, and so older people, arguably the Conservatives’ natural voting turf, will not benefit.

Jeremy Hunt has also announced the reform of the anomaly whereby child benefit starts to be withdrawn from parents when one of the couple earns over £50,000, even though a dual income household where both parties earn £49,999 can claim the benefit in full. To deal with it properly requires an ability for HMRC to look at total household income, which is going to take time. In the interim, Hunt has gone some way to addressing the fairness issue by increasing the threshold at which the benefit is withdrawn to £60,000 with the taper applying between £60,000 and £80,000 salaries.

British ISA

We already have a range of ISAs – general, junior, lifetime, help-to-buy – and Jeremy Hunt is adding another. This one is for British investments and will allow investors to put £5,000 per year into a new British ISA in addition to the normal £20,000 ISA allowance.

While we can see why a Chancellor might want to encourage investment in British stocks, it’s difficult to see how the eligible investments for this new ISA will be defined. A consultation on the design and implementation of the new ISA has just opened and accepts contributions until 6 June 2024.

Alongside this, a new range of ‘British Savings Bonds’, a fixed interest investment, are to be distributed through National Savings & Investments.

Other matters

Among the matters for business, Jeremy Hunt has extended business rate reliefs, particularly for creative and hospitality industries, and raised the VAT threshold from £85,000 to £90,000 to relieve the administrative burden on small businesses.

Finally, business class and first class flights are to be the subject of an increase in the rates of Air Passenger Duty.


So, overall, the Chancellor seems to have done his best to wring tax savings out of the back of the nation’s sofa, arguably mending a few anomalies on the way. It’s probably no surprise that he hasn’t managed to conjure any significant tax rabbits from non-existent hats. However, it won’t have escaped taxpayers’ notice that he hasn’t addressed the increasing clamour to halt the freezes on thresholds for income tax, among others, which are pushing increasing numbers into higher rate tax liabilities.

Clare Munro is our Senior Tax Adviser. Within her day-to-day role, she provides tax advice to high-net-worth clients in relation to their banking and wealth management needs. With a particular interest in inheritance tax and capital gains tax planning, Clare helps clients to structure their wealth tax efficiently to preserve it through family generations.

Important information

This article does not constitute advice.  Tax laws are subject to change and taxation will vary depending on individual circumstances.