WHATS NEW IN THE BUDGET, AND WHAT IT MEANS FOR YOU

November 2024

Hello again! This November, we’re breaking down a few key takeaways from the latest budget and what they might mean for you, your family, and future plans. The budget covers a lot of ground, so we’ll highlight some points that may be particularly important for you to know.

The much-anticipated budget has come and gone, though some hoped-for changes didn’t come through. For example, there were no updates to the winter fuel allowance, leaving recent reductions in place despite rising energy costs. Many had hoped for more relief here, especially with the colder months approaching.

Inheritance Tax: Staying the Same… for Now.

Inheritance tax (IHT) has not increased, but the threshold has been frozen until 2030. This means that while costs may go up, the amount you can pass on tax free will stay the same, potentially leading to more inheritance tax for some. If your estate, including any property, savings, or other assets, is worth more than £325,000, anything above that will be taxed at 40%.

Newly Added: Pensions and Inheritance Tax

Your pension pot may now be included in your taxable estate when you pass it on to loved ones. If you’ve built up savings in your pension, this change could mean a portion of those savings will go to inheritance tax before they’re passed on.

Capital Gains Tax: Changes That Might Impact Your Plans

Capital gains tax (CGT) rates are increasing from 10% to 18% for the lower rate, and from 20% to 24% for the higher rate. The good news is that residential and buy-to-let properties aren’t affected, so if you’re thinking of selling a rental property or your main home, these changes don’t apply. For other investments, like stocks or art, the higher rates could mean more tax if you decide to sell.

Health and Education Budgets See a Boost

There’s a significant increase in funding for healthcare, with £22.6 billion allocated for day-to-day health costs and £3.1 billion for infrastructure. With more funding, we’re hopeful this will lead to better access to healthcare and improvements in services for everyone.

VAT on Private School Fees 

Starting in January 2025, private school fees will be subject to VAT. If your children or grandchildren are in private education, this may mean they’ll need additional support to manage the increased costs to stay in their schools.

Other Noteworthy Changes

The minimum bus fare has risen from £2 to £3. This won’t impact everyone, but it’s quite a jump for those who rely on public transport, especially on shorter routes or for those on a fixed income. If you or your loved ones use buses regularly, this may be one to factor into the monthly budget.

Fuel Duty is Frozen for the coming year, so you won’t be seeing a rise in petrol prices due to fuel duty. This will hopefully bring a bit of relief on transport costs.

Flying Costs: Be cautious if you’re thinking of jetting off by private jet, as air passenger duty has increased by 50%. Regular commercial flights aren’t affected, so your holiday costs shouldn’t change unless you’re taking the luxury route.

And finally, some good news if you enjoy a Pint: If you need a break from all the budget talk, draught duty is down by 1.7%, so pints in pubs will be a little cheaper—every penny counts!

There’s a lot more in the fine print, so if you’re wondering how these updates might impact your financial plans, feel free to get in touch with us. We’re here to help you navigate these changes in a way that makes sense for you.

Until next time, take care.

Iain