Stamp duty

The higher rate of stamp duty land tax (SDLT) payable on second homes, buy-to-let residential properties and companies buying residential property has increased from 3% to 5% from 31 October 2024.

The single rate of SDLT charged to certain corporate bodies on the purchase of residential properties costing more than £500,000 increased from 15% to 17% from 31 October 2024.

No changes are made to SDLT payable on main homes.

Inheritance tax

There are no changes to nil-rate inheritance tax (IHT) bands, which are now frozen at current levels until 5 April 2030.

The nil-rate band is £325,000 and the residence nil-rate band is £175,000, meaning a married couple or civil partners can leave total assets of £1,000,000, exempt from IHT, when left to children and grandchildren.

From 6 April 2027, inherited pension pots will become subject to IHT.

The overseas transfer charge exclusion for transfers to qualifying recognised overseas pension schemes in the European Economic Area (EEA) or Gibraltar has been removed with immediate effect.

From 6 April 2026, business and agricultural property relief will be capped. The first £1 million of combined agricultural and business property will continue to benefit from 100% IHT relief. After that, assets will attract 50% relief, meaning an effective IHT rate of 20%.

The relief rate for qualifying shares in the alternative investment market (AIM) has been cut to 50%, giving an effective IHT rate of 20%.

Non-domicile status will be abolished from 6th April 2025 and replaced with a residence-based regime, which will also end the use of offshore trusts to shelter assets from IHT.  Individuals who opt-in will not pay UK tax on foreign income and gains for the first four years of tax residence.

Capital gains tax

Capital gains tax (CGT) has been increased with immediate effect (from 31.10.24). The lower rate rises from 10% to 18%, and the higher rate from 20% to 24%.

There is no increase in the rate of CGT tax payable on the sale of second homes, which remains at 18% for the lower rate and 24% for the higher rate.

From 6 April 2025, the rate for business asset disposal relief and investors’ relief will increase to 14% and from 6 April 2026 will increase again to 18%, matching the lower main rate.

ISAs

Annual subscription limits will remain at the current level until 5 April 2030.  These are:

• £20,000 for ISAs
• £4,000 for lifetime ISAs
• £9,000 for junior ISAs and child trust funds

Private school fees

Private school fees will be subject to VAT at the standard rate of 20% from 1 January 2025.  This will also apply to boarding services provided by private schools.