How the 2024 Autumn Budget announcements could affect your clients’ wealth

On 30 October 2024, Labour chancellor Rachel Reeves delivered the Budget to Parliament – becoming the first woman ever to do so.

This much-anticipated Budget outlined several tax policy changes that Reeves says will raise £40 billion. On top of this, she announced additional levies and reliefs, and in combination, the Budget may have an effect on your clients’ finances both now and in the future.

Here’s how the Budget could have an impact on your clients’ wealth and why working with a financial planner could be of huge benefit.

Your clients’ Capital Gains Tax and Inheritance Tax bills are very likely to rise

“Tax” was the word on everyone’s lips when 30 October arrived – and for good reason.

In her Budget, Reeves made changes that are set to increase Capital Gains Tax (CGT) and Inheritance Tax (IHT) for investors and wealthy individuals.

Capital Gains Tax

With immediate effect, Reeves increased the rate of CGT for disposing of non-property assets, matching it to the existing property rates.

So, from 31 October 2024 onwards:

• Basic-rate taxpayers will pay 18% CGT on profits, up from 10%
• Higher- and additional-rate taxpayers will pay 24% CGT on profits, up from 20%.
• Trustees and personal representatives on trusts will pay 24% CGT, up from 20%.

Inheritance Tax

At the time of writing, IHT does not apply to a person’s private pension(s) after they pass away. In effect, your clients could pass on their unspent pension wealth tax-free.

However, from April 2027, pensions will be caught in the IHT net. Plus, the nil-rate bands, which designate how much a person can pass to non-spousal beneficiaries tax-free, have been frozen until 2030.

What’s more, the chancellor made changes to IHT levied on farmers. Currently, individuals can claim up to 100% relief on agricultural property (land or pasture that is used to grow crops or rear animals).

From 6 April 2026, the first £1 million of combined business and agricultural assets will continue to attract no IHT at all. However, for assets above this threshold, IHT will apply with 50% relief.

These changes could push your clients’ IHT liabilities up in future.

Your business owner clients could face a change to their costs

If you’re a business owner yourself, you may already be aware of the Budget announcements that may affect business owners.

To recap:

• Corporation Tax has been capped at 25%.
• New, permanently lower business rates relief will be introduced in the 2026/27 tax year, applying to leisure, hospitality, and retail properties. In 2025/26, some businesses in these sectors will also benefit from relief of up to 40% on their bills.
• The national living wage will increase by 6.7% from April 2025, to £12.21 an hour for workers aged 21 and over.
• The national minimum wage for those between 18 and 20 will rise to £10 an hour from April 2025, and apprentice hourly wages will go up to £7.55 an hour.
• In April 2025, employer National Insurance (NI) will increase from 13.8% to 15%, and the threshold at which businesses start paying NI will fall to £5,000. The Employment Allowance will rise to £10,500 and the £100,000 cap will be removed, meaning that overall, 865,000 businesses won’t pay NI, and more than half of businesses who do pay NI won’t see a change to their liability.

If you have business owner clients, they may be worried about how these levies could affect their profitability.

Clients who own second homes will face higher Stamp Duty costs

Starting on 31 October 2024, the chancellor announced that those with properties that are not their main home – including holiday homes and buy-to-lets – will face an increase to the Stamp Duty surcharge. It has increased from 3% to 5%.

Simply put, clients looking to expand their property portfolio will face higher charges than before the Budget, and this may be affecting their wealth creation plans in the coming years.

Clients’ private school fees for their children are likely to go up after a VAT increase

Finally, if your clients have children who attend private school, they may see an increase in fees from January 2025, because VAT will be applied to private schools for the first time.

Your clients could benefit from bespoke financial planning in light of the Budget announcements

While there is no need for your clients to panic post-Budget, they could benefit from speaking to a financial planner and assessing how their outgoings may change.

From there, we can form a bespoke financial plan that takes all your clients’ unique needs into account, giving them the peace of mind that they can still achieve their goals even after the Budget.

To put your clients in touch with us, email enquiries@prosserknowles.co.uk or call 01905 619 100.

And, for a comprehensive breakdown of the chancellor’s announcements, visit our news page.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, tax planning, or cashflow planning.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.