BCC Tax Newsflash | UK General Election

By BCC Secretariat for British Chamber of Commerce for Luxembourg, July 08 2024
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This newsflash is generously provided to you by the member Firms of the BCC Tax Group

Dear Members of the British Chamber:

Last week saw a Labour landslide victory at the UK General Election 2024 and the formation of a new Labour Government.  Changes in UK tax policy are expected over the coming months and years.

The British Chamber will proactively keep you updated on UK tax developments that may impact individuals and businesses based in Luxembourg and/or with economic ties with the UK.  It is likely that we will have more detail on the initial proposed UK tax changes to be implemented by the new Government in the Autumn.  In the meantime, this is an overview of the main Labour Party tax announcements before the election:

•     No increases to national insurance, income tax, VAT or corporation tax rates.
•     Income tax thresholds frozen until 2028.
•     No reversal to the changes to the non-UK domiciled regime effective 6 April 2025, that were announced by the previous government during the Spring Budget earlier this year.
•     No reversal of the abolition of the pensions lifetime allowance.
•     VAT at 20% on private school fees.
•     Aim to raise more revenue from tax compliance and digitisation to help close the tax gap (with UK and offshore tax compliance likely to be an area of particular focus).
•     Amendment of the tax treatment of carried interest in private equity funds so that it is taxed at income tax (rather than CGT) rates.  There have been further announcements in the last few weeks that suggest that such a change would be subject to consultation and that some exemptions from the proposal may apply.
•     The Labour Party confirmed it would seek to end the use of trusts to avoid UK inheritance tax (IHT), suggesting the potential removal of the excluded property trust regime for all trusts, including those set up before 6 April 2025.
•     Increase of 1% in stamp duty land tax (SDLT) for purchases of UK residential property by non-UK residents.

Please note:  The information and opinions contained herein are for information purposes only. They do not constitute any form of legal or tax advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances and is not intended to be relied upon in making (or refraining from making) any specific decisions.

Kind regards,

BCC Secretariat

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