Posted: 20 / 02 / 2024
The next Budget announcement is scheduled for Wednesday 6th March, and will probably be the last major fiscal event for Jeremy Hunt and the Conservative Party before the next general election.
As usual, we will be preparing a detailed guide to all of the announcements from the Spring Budget, which we will send out shortly afterwards, however here are the predictions doing the rounds in the tax profession around what the Spring Budget 2024 might include…
Changes to income tax Spring Budget 2024
A couple of areas that should be looked at are the threshold at which child benefit is clawed back (currently £50k) and the threshold at which the tax-free personal allowance is lost (currently £100k). However, these are not as headline-grabbing as a cut to the rates of income tax, which is why some industry experts are predicting a 2% cut.
A reduction in dividend allowance? Spring Budget 2024
The tax free dividend allowance is scheduled to reduce to £500 (from the current £1,000) from April. Some are predicting this reduction could be scrapped.
A reduction in capital gains tax Spring Budget 2024
The tax free capital gains tax allowance (called the annual exemption) is scheduled to reduce to £3,000 from April. Again, some are predicting this reduction will be scrapped.
There continue to be rumours going round about a more widespread change to the rates of capital gains tax, bringing them closer to income tax rates. This would be a major tax change which I can’t see happening in an election year.
Reform to inheritance tax Spring Budget 2024
There was a great deal of speculation before the Autumn Statement last year that there would be significant changes to IHT. We didn’t see anything then, so will we see anything now?
The consensus amongst the profession is that it is unlikely to be completely abolished, but we could see some reform, such as cutting the rate or increasing the tax-free allowance.
An increase to the ISA investment threshold Spring Budget 2024
The current annual investment limit into an ISA of £20,000 is rumoured to be increasing, with some in the profession expecting £30,000.
Given the current interest rates and the reduced dividend and capital gains tax allowances, this would allow more investment income to be generated in a tax-free environment. There is also a fair amount of speculation that the Lifetime ISA will be reformed to remove the restrictions when the funds are used to purchase a first home over £450,000.
