UK and International Tax news

Finance (No 2) Bill 2024 Published

Friday 22nd March 2024

The Finance (No 2) Bill 2024 has been introduced into Parliament with its first reading on 13 March and will move to its second reading on 17 April 2024.

Key tax announcements made by the Chancellor in his Spring Budget earlier this month and included in the Bill are as follows:

  • Increases in the thresholds relating to the High Income Benefit Charge to £60,000 and £80,000 from 2024/25.
  • Reduction in the higher CGT rate for residential property gains to 24% with effect for disposals made on or after 6 April 2024.
  • Abolition of Multiple Dwellings Relief for SDLT from 1 June 2024.
  • Changes to the Transfer of Assets Abroad legislation with effect from 6 April 2024 targeting individuals who attempt to circumvent the anti avoidance rules by using a close company to transfer assets abroad.

Other key announcements made by the Chancellor in his Spring Budget but not included in the Finance Bill include reform to the non UK domiciled tax rules and the abolition of the furnished holiday lettings regime.

The government will abolish the remittance basis of taxation for non-UK domiciled individuals and replace it with a simpler residence-based regime, which will take effect from 6 April 2025. Individuals who opt into the regime will not pay UK tax on foreign income and gains for the first four years of tax residence.

Overseas Workday Relief (OWR) will also be reformed with eligibility for the relief based on the new regime. OWR will continue to provide income tax relief for earnings from duties carried out overseas for the first three years of tax residence with restrictions on remitting these earnings removed.

The government has also announced an intention to move to a residence-based regime for Inheritance Tax, with plans to publish a policy consultation on these changes, followed by draft legislation for a technical legislation, later in the year.

The abolition of the Furnished Holiday Lettings tax regime will remove the tax advantage for landlords who let out short-term furnished holiday properties over those who let out residential properties to longer-term tenants. This will take effect from April 2025.

Draft legislation will be published in due course and include an anti-forestalling rule which will prevent the obtaining of a tax advantage through the use of unconditional contracts to obtain capital gains relief under the current FHL rules. This rule will apply from 6 March 2024.

If you would like more information on the above tax changes, please contact Keith Rushen on 0207 486 2378.

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