For many UK taxpayers, recent tax changes represent a step change in their UK tax burden. With the Capital Gains Tax annual exempt amount being cut from £12,300 to £6,000 and then a further cut to £3,000 from April 2024 and cuts in the Dividend Allowance from £2,000 to £1,000 from April 2023 and then to £500 from April 2024, it has seemed like constant bad news from the UK Treasury recently.
The media buzz in September 2023, about Rishi Sunak considering a cut to Inheritance Tax “IHT” or in some stories even considering scrapping the tax altogether, may have provided some hope, but to date that is nothing more than speculation. What is clear is that this is not a simple task, IHT is inter-linked with CGT in the UK tax legislation and any changes to IHT would necessitate changes to CGT too, which would require careful evaluation of the impacts.
With the next UK general election scheduled no later than 28 Jan 2025 and the incumbent Government trailing in the polls and having recently faced two significant by-election defeats, it seems likely that the March 2024 budget will be used as a means to try to win back voters, so perhaps we can expect to see some positive changes in March?
Your Fairway team will keep you updated on the latest changes as they arise.
