The Autumn Statement - https://www.naomihaynes.co.uk/article/detail/2024/november/autumn-statement.html 

What happened, what does it mean and what can I do?

A business-owner’s guide to the recent budget

 EMPLOYER'S NATIONAL INSURANCE

What happened?

• Employer National Insurance increased from 13.8% to 15% (from April 2025)

• Threshold dropped for employers from £9,100 to £5,000 (from April 2025)

• Employment Allowance increased from £5,000 to £10,500 (from April 2025)

What does it mean

• If you have a Limited company and/or have an employee – payroll just got more expensive

• Employment Allowance raise could lead to lower National Insurance costs, but this is not for you if –

o You are a sole trader

o You are a limited company without 2 or more directors earning above the secondary threshold for National Insurance

What can I do?

• Discuss with Accountant / Bookkeeper about split between dividends /salary for directors

• Pensions – Salary Sacrifice

o Employers: If you have an employee look at moving their pension contributions to salary sacrifice

o Limited Companies: Pay more into your pensions

CAPITAL GAINS TAX

What happened?

• Capital Gains Tax (CGT) increased from 10% to 18% (for basic rate taxpayers) and from 20% to 24% (for higher and additional rate taxpayers)

What does it mean

• If you sell any assets (non-residential additional properties) and make a profit above £3,000, you will be paying more in Capital Gains Tax

• If you ever want to sell your business in the future, the rates of CGT also went up –

o Businesses usually qualify for Business Asset Disposal Relief, whereby you only pay CGT at the lower rate on the first £1million of gains

o This rate just went up from 10% to 18% (gradually increasing from April 2025 to April 2026)

What can I do?

• Maximise Allowances: Any investments – make sure you maximise use of your ISA allowance and pension allowance every year (no CGT paid within either of  these)

• Married Couples / Civil Partners: Sharing ownership of assets before sale will double allowances available

• Pensions: If you have a Limited Company - You can transfer assets from your business into your pension without any taxes at all (up to relevant allowances)

• Tax Efficient Investments: Speak to a Financial Adviser (like myself) who can advise you on investments that can defer your CGT liabilities

INHERITANCE TAX

What happened?

• Inheritance Tax rate remains at 40%

• Frozen Inheritance Tax Thresholds extended to 2030

• £1million limit on Business Property and Agricultural Relief (with excess only receiving 50% relief)

• AIM Share Relief reduced from 100% to 50%

What does it mean

• More estates will be paying Inheritance Tax

• Family run businesses will see large increases in Inheritance Tax that needs to be paid as the business is passed through the family

What can I do?

• Married Couples: Passing from one spouse (or civil partner) to another will not incur Inheritance Tax

• Professional Advice: Seeking help around this is essential to avoid forced “fire sales” of family-run businesses

PENSIONS

What happened?

• For most pensions, death benefits will be included in Inheritance Tax charges and calculations (proposed from April 2027)

What does it mean

• Many more estates will be paying Inheritance Tax

What can I do?

• Many people did not even know that pensions are (currently) not included in estates for Inheritance Tax purposes

• Pensions are very tax efficient ways to save for YOUR FUTURES

• Financial planners help people through their retirement to ensure they do not run out of money

• This does not mean you should stop or reduce your contributions into a pension, or think any less of them!

OTHER CHANGES

What happened?

• Stamp Duty Land Tax

o The Stamp Duty Land Tax has been increased for second homes from 3% to 5% (from 31 October 2024)

o First time buyers will see a reduction in the threshold when they start to pay this tax - from £425,000 to £300,000 (from April 2025)

o First time buyers relief only available on properties up to £500,000

• Carer’s Allowance

o For anyone receiving Carer’s Allowance, the earnings limit has been increased by £45 per week and is now around £10,000 per year.

WHAT DO YOU THINK?

• This highlights the value of professional advice

• There are many unintended consequences after the above –

o People living too long (aka running out of money in retirement)

o Not selling assets

o Not being able to pass family-run businesses down the generations

o Less rental properties on the market / higher rents

o Not saving for retirement

o Hiring / paying less

Don’t be caught in the trap… Don’t hide from the news….

There are people who can help

NEED HELP?

Speak to a professional – like me

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The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

Case Study - analysing complex company structures and trust documents in divorce settlements

Husband secures financial settlement that protects his company assets

Tom came in to see Saika Alam who is a member of our Women In Business Network. He had solicitors already, but he was not entirely confident that they had a good understanding of his case. He was therefore looking to transfer solicitors. He spoke with several solicitors before choosing to instruct Saika who is a partner and the head of the family law department at Branch Austin McCormick Solicitors based in St James’s, London.

Tom and his wife Gina married in 2007 and separated in 2022. They had two young children aged 10 and 8. Both Tom and Gina were still living in the family home while the court proceedings were ongoing.

Tom was concerned that Gina’s solicitors where extremely aggressive and had grossly inflated the assets. In divorce proceedings, a questionnaire is a document setting out a request for further information and documentation where information already provided by the other party is inadequate. Gina’s solicitors had raised a lengthy questionnaire that far exceeded the court’s guidance on the length of these documents.

How Saika could help

When Saika received Tom’s file from his previous solicitors, it became immediately obvious to her that Gina’s solicitors had misread or misunderstood what the business interests were. They were seeking extensive, completely unnecessary information and the valuations of seven different companies of which Tom was a shareholder, either currently or in the past. They were also seeking information on private trust documents between Tom’s family members and himself. 

It was clear that robust court intervention and case management was required at the First Directions Appointment Hearing on the general direction of the case.  There was a danger in this case of the rising costs becoming quickly disproportionate to the value of the assets.

At the hearing we were able to reduce very substantially the number of issues on the questionnaire for Tom to answer and limit company valuations to just the one company.  Gina’s solicitors were insistent on a valuation of this company because it had a turnover of £15.5 million. However, they had completely overlooked the actual profit the company was making.  They also rejected the company accountant’s valuation.

Gina’s solicitors were also making enquiries of family trust documents. However, on detailed consideration of these documents it was clear that Tom was only a trustee of the family trusts and not a beneficiary.  This meant that he could not personally benefit from these trusts. The trusts were set up to prevent Tom’s future appointment as a beneficiary. 


Final outcome

The formal company valuation undertaken jointly for both Tom and Gina by an independent accountant produced a lower valuation than the valuation proffered by Tom’s company accountant. 

At the Financial Dispute Resolution Hearing we put forward a detailed settlement proposal which was in the main accepted by the judge. 

There were extensive arguments over whether a minority discount should apply to Tom’s shares in the company. Gina was looking to make a claim on the shares and keep the family home. 

We were able to achieve a successful outcome for Tom that allowed him to keep all his shares intact which was his first priority.  Also, all claims on the properties in the family trust were dismissed. Gina kept the family home which is what Tom had offered to her in advance of the hearing. 

Important Note
All our case studies are based on our real-life clients who have consented to the use of their information. However, to protect their identities we have changed their names and some of the factual details of their cases.

Further advice and information

If you are going through a divorce or civil partnership dissolution and need advice on the financial aspects of your case, do get in touch for a complimentary initial discussion with Saika Alam.  You can contact her at sa@branchaustinmccormick.com or on 020 7851 0110.

Image credit Saika Alam

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