Chain Mail: Spring Budget Special

FSL’s Chain Mail is a regular blog containing links to news articles that we think are worth sharing. In this edition, we look at what industry experts, politicians and journalists thought of the Chancellor’s 2024 Spring Budget.  

Non-dom regime scrapped

Shadow Chancellor Rachel Reeves told Sky News the abolition of the tax status was an “utter humiliation” for the government.

Reeves claimed that had if government done this earlier, as Labour had suggested, they could have brought in “billions of pounds extra to keep taxes down” or invest in other priorities. 

The Telegraph, meanwhile, called it a “raid on the rich” and questioned whether these wealthy non-doms would leave the UK because of the changes.

A poll ran by Professional Adviser found that most of the industry (52%) believe that the non-dom tax regime should not have been abolished in the Spring Budget.

One respondent told Professional Adviser that the UK was already experiencing a “brain drain” and that the abolition of the non-dom rules would “speed up” this process.

The new British ISA

AJ Bell Co-Founder Andy Bell slammed the new ISA in the wake of the Budget. He described the move as a “poorly thought-through proposal” that was “doomed to fail”. 

“To be clear, I’m not saying the aim of encouraging more investment in UK companies isn’t a good one,” he wrote in an opinion piece for Money Marketing. “The British Isa is simply the wrong way to achieve it. If the aim is to boost investment in UK companies, the answer lies elsewhere. For example, extending the existing Aim exemption from stamp duty and/or inheritance tax to a wider pool of UK assets would actually have a meaningful impact.”

Mike O’Shea, Premier Miton Investors CEO, was far more upbeat. He told City A.M. that the move was a “crucial step” in starting to recapitalise British businesses and make the UK listing regime the “global capital of capital.” 

CGT changes 

The policy director of the National Residential Landlord Association, Chris Norris, told The Telegraph that Chancellor’s cut to CGT on property was “slightly misleading” as the cut would be “all but neutralised” by the reduction in the annual tax-free allowance. 

The annual tax-free allowance dropped to £6,000 last year from £12,000 the year prior. It will fall again to £3,000 next month.

“If you compare the tax on property gains at 28% in 2022 to those post April  – assuming the 24% rate – you need to make a pretty substantial gain before you’re better off,” Norris said. 

Nicky Stevenson, Managing Director at Fine & Country, meanwhile, said the reduction in the higher rate of CGT on property would inject some “extra energy” into the housing market. 

“Teetering landlords unsure about whether to take the plunge and their property will be encouraged by this announcement. This should offer hope for first-time buyers who are the foundation of the property market,” she told Financial Reporter.