Fall 2024 Budget

On October 30, 2024, the Minister of Finance presented the Budget with several important changes that mainly affect the taxation of individuals.

Changes already in effect:

• Capital Gains Tax (CGT) tax rates increased from 10% and 20% to 18% and 24%, respectively, for sales made since October 30, 2024.
• The tax base for remittances for non-domiciled people was eliminated and the concept of domicile was replaced by a residence-based regime, in force since April 6, 2025, with transitional measures to mitigate the impact.
• The profit sharing tax rate will rise to 32% as of April 6, 2025.
• Employers' social security contributions have increased from 13.8% to 15% since April 6, 2025. In addition, the threshold from which employers must pay IAS falls from 9,100 GBP to 5,000 GBP per year until 2028, then adjusted according to the consumer price index.

Announcements for the coming years:

• As of April 6, 2026, deductions for agricultural and commercial real estate will be reformed: a deduction of 100% will be applied for the first million pounds in combined assets and 50% for the rest.
• The deduction for stocks that are not listed on a recognized stock exchange (such as the Alternative Investment Market - AIM) will be halved from that same date.
• Also in 2026, the profit sharing regime will be integrated into income tax. Accrued interest that meets tax requirements will have an effective rate of 34.075% for taxpayers with an additional rate. Legislation is expected to clarify which jurisdiction has tax power, with a bill expected before the parliamentary summer recess of 2025.
• As of April 6, 2027, unused pension funds (including death benefits) will be considered part of the estate for inheritance tax purposes.