Finance (No. 2) Act 2024
Income tax is charged for the tax year 2024-25.
For the tax year 2024-25 the main rates of income tax are as follows—
the basic rate is 20%,
the higher rate is 40%, and
the additional rate is 45%.
For the tax year 2024-25 the default rates of income tax are as follows—
the default basic rate is 20%,
the default higher rate is 40%, and
the default additional rate is 45%.
For the tax year 2024-25 the savings rates of income tax are as follows—
the savings basic rate is 20%,
the savings higher rate is 40%, and
the savings additional rate is 45%.
For the tax year 2024-25 the amount specified in section 12(3) of ITA 2007 (the starting rate limit for savings) is “£5,000”.
Accordingly, section 21 of that Act (indexation) does not apply in relation to the starting rate limit for savings for that tax year.
In— for “£50,000” substitute £60,000”.
section 681B(1)(a) of ITEPA 2003 (liability to high income child benefit charge if person’s adjusted net income exceeds £50,000), and
section 681C(2)(b) of that Act (amount of the charge), in the definition of “L” ,
In section 681C(2)(b) of that Act, in the definition of “X” (which, in combination with the other parts of the formula, secures that there is a taper in the charge up to adjusted net incomes of £60,000), for “£100” substitute “£200”.
The amendments made by this section have effect for the tax year 2024-25 and subsequent tax years.
If— the entitlement to those amounts is to be treated for the purposes of Chapter 8 of Part 10 of ITEPA 2003 as an entitlement to those amounts for weeks in the tax year 2024-25.
a person (“P”) who is entitled to child benefit in respect of one or more children makes a claim, on or after 6 April 2024 but before 8 July 2024, for the payment of the benefit, and
in consequence of the backdating of the entitlement, P is entitled to an amount in respect of child benefit for one or more weeks in the tax year 2023-24,
But subsection (4) does not apply if—
ignoring the deeming in that subsection, there would be no liability (whether of P or anyone else) to a high income child benefit charge for the tax year 2023-24 in respect of those amounts, or
P makes an election for that subsection not to apply.
P may make an election under subsection (5)(b) only if P reasonably considers that, in the absence of the election, P’s liability to a high income child benefit charge for the tax year 2024-25 in respect of those amounts would exceed P’s liability to that charge for the tax year 2023-24 in respect of those amounts.
Section 681H(3) of ITEPA 2003 applies for the purposes of subsection (4) as it applies for the purposes of Chapter 8 of Part 10 of that Act.
In section 1H of TCGA 1992 (the main rates of CGT)—
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in subsection (2), omit paragraph (a) together with the “or” at the end of the paragraph,
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in subsection (5), omit paragraph (a) together with the “or” at the end of the paragraph, and
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In section 1I of that Act (income taxed at higher rates or gains exceeding unused basic rate band)—
in subsection (1)—
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in that paragraph, omit “residential property gains or”,
in subsection (2), in the words after paragraph (b)—
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omit “residential property gains or”,
in subsection (5)—
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in that paragraph, omit “residential property gains or”, and
in subsection (9)—
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in that paragraph, omit “residential property gains or”.
The amendments made by this section have effect in relation to disposals made on or after 6 April 2024.
Section 58D of, and Schedule 6B to, FA 2003 (relief for transfers involving multiple dwellings) are repealed.
In consequence of the repeal of those provisions—
in Part 4 of FA 2003—
in section 87(3) (interest on unpaid tax: meaning of “relevant date”), omit paragraph (aza),
In sub-paragraph (5)—
in Schedule 5 (amount of tax chargeable: rent), in paragraph 9, in sub-paragraph (4), omit “or 6B” and, in sub-paragraph (5), omit “or Schedule 6B”,
in Schedule 10 (returns, enquiries, assessments and appeals), in paragraph 12(2A)(a), for “, 81A” substitute “or 81A” and omit “or paragraph 6 of Schedule 6B (adjustment for change of circumstances)”, and
in Schedule 15 (partnerships), in paragraphs 11(2C) and 19(2C), in the substituted paragraph, omit “or 6B”,
in Schedule 36 to FA 2008 (information and inspection powers), in paragraph 21A(7), omit paragraph (b) and the “or” before it, and
in FA 2011, omit section 83 and Schedule 22 (transfers involving multiple dwellings).
The amendments made by this section have effect in relation to land transactions the effective date of which falls on or after 1 June 2024.
But those amendments do not have effect in relation to a land transaction if—
the transaction is effected in pursuance of a contract entered into and substantially performed before 1 June 2024, or
the transaction is effected in pursuance of a contract entered into on or before 6 March 2024 and is not excluded.
For this purpose a land transaction is excluded if—
there is any variation of the contract, or assignment of rights under the contract, after 6 March 2024,
the transaction is effected in consequence of the exercise after that date of any option, right of pre-emption or similar right, or
after that date, there is an assignment, subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.
If— a claim under that Schedule is available only in relation to the pre-commencement land transactions.
pre-commencement land transactions are linked to post-commencement land transactions, and
all of the transactions would (but for this section) be relevant transactions for the purposes of Schedule 6B to FA 2003,
If a claim under that Schedule is made in relation to those transactions, none of the post-commencement land transactions are to be regarded any longer as linked to any of the pre-commencement land transactions for the purposes of Schedule 6B to FA 2003 and all other purposes of Part 4 of that Act.
For this purpose—
“pre-commencement land transactions” means land transactions the effective date of which falls before 1 June 2024 or which meet the condition in subsection (4)(a) or (b), and
“pre-commencement land transactions” means land transactions the effective date of which falls before 1 June 2024 or which meet the condition in subsection (4)(a) or (b), and
“post-commencement land transactions” means all other land transactions.
“post-commencement land transactions” means all other land transactions.
The amendments made by this section also do not have effect in relation to land transactions the effective date of which falls on or after 1 June 2024 if they fall within a description of land transactions specified in regulations made by the Treasury (irrespective of the date on which the regulations are made).
The regulations may make provision of a kind mentioned in section 114(6)(a) to (c) of FA 2003 but may not be made on or after 1 February 2025.
Schedule 6ZA to FA 2003 (relief for first-time buyers) is amended as follows.
In Part 1 (eligibility for relief), after paragraph 3 insert—
In determining any question for the purposes of sub-paragraph (1), paragraph 3 of Schedule 16 is to have effect as if sub-paragraphs (2) and (3) (trustee of bare trust granted a lease treated as purchaser of the whole of the interest acquired) were omitted.
The amendment made by subsection (2) has effect for the purposes of claims for relief under paragraph 1 of Schedule 6ZA to FA 2003 made in relation to any land transaction the effective date of which falls on or after 6 March 2024.
The amendment made by subsection (3) also has effect for the purposes of claims for relief under that paragraph made in relation to any land transaction the effective date of which falls on or after that date unless—
the transaction is effected in pursuance of a contract entered into on or before that date, and
the transaction is not excluded.
For this purpose a land transaction is excluded if—
there is any variation of the contract, or assignment of rights under the contract, after 6 March 2024,
the transaction is effected in consequence of the exercise after that date of any option, right of pre-emption or similar right, or
after that date, there is an assignment, subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.
Section 71 of FA 2003 (certain acquisitions by registered social landlord) is amended as follows.
In the heading, for “registered social landlord” substitute “registered providers of social housing etc”.
In subsection (1), for paragraph (a) substitute—.
In subsection (1A)—
for paragraph (b) substitute—, and
omit the “or” after paragraph (a).
In subsection (2) for “relevant housing provider”, in each place it occurs, substitute “non-profit registered provider of social housing”.
In subsection (3)—
omit paragraphs (b) and (e) to (g), and
for paragraph (h) substitute—.
In subsection (4) omit paragraphs (b) and (d) (but not the “or” after paragraph (d)).
In subsection (5)—
after “means” insert —, and
in paragraph (b) (which is a result of the previous amendment) omit the words from “within” to the end.
After subsection (5) insert—
In section 121 of FA 2003 (minor definitions), omit the definition of “registered social landlord”.
In section 122 of FA 2003 (index of defined expressions), omit the entry for “registered social landlord”.
The amendments made by this section have effect in relation to land transactions the effective date of which falls on or after 6 March 2024.
In consequence of those amendments, in section 150 of FA 2013 (annual tax on enveloped dwellings: relief for providers of social housing etc)—
in subsection (2)(a)—
for “relevant” substitute “qualifying”, and
omit the words from “(that” to “landlord)”,
in subsection (3), for “relevant”, in each place it occurs, substitute “qualifying”, and
for paragraphs (a) to (c) in subsection (4) substitute—
Subsection (13) is to be treated as having come into force on 6 March 2024.
In paragraph 3 of Schedule 4A to FA 2003 (application of the higher rate of 15% to transactions where purchaser is a company etc)—
in sub-paragraph (3)(a) and (b), after “company” insert “but is not a public body”, and
in sub-paragraph (4), at the end insert “and, for the purposes of that sub-paragraph, whether a person is a public body is to be determined in accordance with section 66”.
The amendments made by this section have effect in relation to land transactions the effective date of which falls on or after 6 March 2024.
IHTA 1984 is amended in accordance with subsections (2) to (5).
In section 16(1) (grant of tenancies of agricultural property), omit “, the Channel Islands or the Isle of Man”.
In section 115 (agricultural property relief: preliminary)—
in subsection (3), omit the words from “(or” to the end;
for subsection (5), substitute—
In section 116 (agricultural property relief: the relief), omit subsection (8).
In section 125 (woodlands relief)—
in paragraph (a) of subsection (1), after “land” insert “in the United Kingdom”;
omit subsection (1A).
In consequence of the amendments made by subsections (2) to (5), in FA 2009 omit section 122.
The amendments made by this section have effect—
in relation to transfers of value made on or after 6 April 2024, and
in relation to occasions on or after 6 April 2024 on which tax falls to be charged under Chapter 3 of Part 3 of IHTA 1984.
Corporation tax is charged for the financial year 2025.
The main rate of corporation tax for that year is 25%.
For the purposes of Part 3A of CTA 2010, for the financial year 2025—
the standard small profits rate is 19%, and
the standard marginal relief fraction is 3/200ths.
Chapter 4 of Part 14A of CTA 2009 (application of expenditure credit etc to films and television programmes) is amended as follows.
After section 1179DJ insert—
In section 1179DN (disclosure of information for certification purposes), in subsection (1)(b), for “1179DK” substitute “1179DJA”.
In section 1179DR (qualifying expenditure)—
the existing text becomes subsection (1);
after that subsection insert—
In section 1179DV (rate of credit)—
in subsection (2)(a), after “animation” insert “or a certified low-budget film”;
in subsection (3)(a), after “animation” insert “but is not a certified low-budget film”;
after subsection (5) insert—;
in subsection (6), for “or (5)” substitute “, (5) or (5A)”.
The amendments made by section 14 have effect only in relation to films whose principal photography begins on or after 1 April 2024.
A claim for audiovisual expenditure credit may not be made in reliance on those amendments before 1 April 2025.
The amendments made by section 14(5) have effect only in relation to expenditure incurred on or after 1 April 2024.
An application for a low-budget certificate may not be made before the appointed day.
The appointed day is a day before 1 April 2025 to be appointed by the Secretary of State by regulations made by statutory instrument with the approval of the Treasury.
Section 1179DJA(7) of CTA 2009 does not prevent the grant of a low-budget certificate if—
the existing certificate was granted further to an application made before the day appointed for the purposes of subsection (4), and
the low-budget certificate is granted further to an application made within the period of 6 months beginning with that day.
If a low-budget certificate is granted in reliance on subsection (6), the existing certificate ceases to have effect, but not (despite section 1179DJ(8) of CTA 2009) in respect of any completed accounting period.
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after an accounting period of the company ends on or after 1 April 2024, and
further to an application made within the period of 6 months beginning with the day appointed for the purposes of subsection (4),
In this section, “a low-budget certificate” means a certificate granted in accordance with section 1179DJA(1) of CTA 2009.
In section 1217K(4) of CTA 2009 (amount of theatre tax credit)—
in paragraph (a), for “25%” substitute “45%”, and
in paragraph (b), for “20%” substitute “40%”.
In section 17 of FA 2022 (which provided for a temporary increase in the amount of theatre tax credit)—
omit subsection (3), and
in subsection (4), for “, 1 April 2025 or 1 April 2026” substitute “or 1 April 2025”.
The amendments made by this section have effect in relation to accounting periods beginning on or after 1 April 2025 (but see section 17(4) of FA 2022 for accounting periods which straddle that date).
In section 1217RG(4) of CTA 2009 (amount of orchestra tax credit), for “25%” substitute “45%”.
In section 19 of FA 2022 (which provided for a temporary increase in the amount of orchestra tax credit)—
omit subsection (3), and
in subsection (4), for “, 1 April 2025 or 1 April 2026” substitute “or 1 April 2025”.
The amendments made by this section have effect in relation to accounting periods beginning on or after 1 April 2025 (but see section 19(4) of FA 2022 for accounting periods which straddle that date).
In section 1218ZCG(1) of CTA 2009—
omit paragraph (c) (date before which qualifying expenditure must be incurred), and
accordingly, omit the “and” before that paragraph, and, at the end of paragraph (a), insert “and”.
In section 1218ZCH(4) of that Act (amount of museums and galleries exhibition tax credit)—
in paragraph (a), for “25%” substitute “45%”, and
in paragraph (b), for “20%” substitute “40%”.
In section 21 of FA 2022 (which provided for a temporary increase in the amount of museums and galleries exhibition tax credit)—
omit subsection (3), and
in subsection (4), for “, 1 April 2025 or 1 April 2026” substitute “or 1 April 2025”.
The amendments made by subsections (2) and (3) have effect in relation to accounting periods beginning on or after 1 April 2025 (but see section 21(4) of FA 2022 for accounting periods which straddle that date).
In the Energy (Oil and Gas) Profits Levy Act 2022, after section 17 insert—
The Treasury may by regulations make provision applying any provision about tax that applies in connection with authorised co-ownership schemes so that the provision applies (with or without modifications) in connection with any co-ownership scheme which— and such a scheme is referred to as a “Reserved Investor Fund (Contractual Scheme)” (or a “RIF”).
is not an authorised co-ownership scheme,
is an AIF, as defined by regulation 3 of the Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773),
meets the conditions set out in section 261E(2) and (3) of the Financial Services and Markets Act 2000 (participation limited to professional or large investors), and
meets such other conditions as are set out in regulations under this section,
Regulations under subsection (1)(d) may—
set conditions about a scheme’s connection with the United Kingdom, its diversity of ownership, the kinds of property it holds and the tax status of its participants;
set such other conditions that the Treasury consider appropriate for the purposes of a scheme becoming, or remaining, a RIF;
make provision about the tax consequences that follow a co-ownership scheme meeting or ceasing to meet one or more of the conditions for being a RIF.
Regulations made by virtue of subsection (2)(a) or (b) may include provision—
imposing procedural requirements in respect of a co-ownership scheme becoming, or ceasing to be, a RIF;
treating a co-ownership scheme as meeting a condition for a specified period for the purposes of the scheme becoming a RIF, or remaining a RIF for that period;
allowing a RIF to remedy a breach of a condition for the purposes of remaining a RIF;
about the accounts that must be kept in relation to a RIF (and such provision may be made by reference to a document as amended from time to time);
requiring information and notices to be submitted to His Majesty’s Revenue and Customs (“HMRC”);
imposing penalties for failure to comply with requirements.
Regulations under this section may—
confer a discretion on HMRC to do anything under, or for the purposes of, the regulations;
include consequential, incidental, supplementary, transitional, transitory or saving provision;
amend, or otherwise modify, any enactment (whenever passed or made).
A power to make regulations under this section is exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
In this section—
“authorised co-ownership scheme” means a co-ownership scheme authorised for the purposes of the Financial Services and Markets Act 2000 by an authorisation order in force under section 261D(1) of that Act;
“authorised co-ownership scheme” means a co-ownership scheme authorised for the purposes of the Financial Services and Markets Act 2000 by an authorisation order in force under section 261D(1) of that Act;
“co-ownership scheme” has the meaning given by section 235A(2) of that Act.
“co-ownership scheme” has the meaning given by section 235A(2) of that Act.
In section 54(2)(c) of FA 2022 (amount of charge in case of persons whose UK revenue is very large), for “£250,000” substitute “£500,000”.
The amendment made by this section has effect for the financial year beginning with April 2024 and subsequent financial years.
Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad) is amended as follows.
After section 720 (charge to tax on income treated as arising under section 721) insert—
After section 727 (charge to tax on income treated as arising under section 728) insert—
In section 721(1), after “720(1)” insert “or 720A(1)”.
In section 728, after “727(1)” insert “or 727A(1)”.
After section 719 (meaning of “associated operation”) insert—
In section 749 (restrictions on particulars to be provided by relevant lawyers)—
in subsections (2) and (4), for “a body corporate to which subsection (6) applies” substitute “a closely-held company whose business does not consist wholly or mainly of the carrying on of a trade or trades”, and
omit subsection (6).
In section 750 (restrictions on particulars to be provided by banks), in subsection (3), for “a body corporate to which section 749(6) applies” substitute “a closely-held company whose business does not consist wholly or mainly of the carrying on of a trade or trades”.
In section 751 (the tribunal’s jurisdiction on appeals), before paragraph (a) insert—.
The amendments made by this section have effect in relation to income arising on or after 6 April 2024.
In section 35 of VATA 1994 (refund of VAT to persons constructing certain buildings)—
in subsections (1) and (1C), before “the Commissioners shall” insert “subject to subsections (2) to (2C),”, and
after subsection (2) insert—
The amendments made by subsection (1) have effect in relation to claims under section 35 of that Act made on or after the day on which this Act is passed.
In section 50 of VATA 1994 (terminal markets)—
in subsections (1) and (2)(b), for “ordinarily engaged” substitute “involved”, and
in subsection (3), for the words from the first “with respect to” to the end substitute—for different purposes, including different provision in relation to—
In Part 2 of Schedule 54A to FA 2009 (further provision as to late payment interest and repayment interest)—
in paragraph 5 (interpretation), omit the definition of “VAT credit”,
in paragraph 7 (conditions for recovery of certain amounts of repayment interest), in sub-paragraph (1), for “on a VAT credit” substitute “in respect of an amount that is, or relates to, value added tax”, and
in paragraph 8 (common period rules for value added tax)—
in sub-paragraph (2), for paragraphs (a) and (b) substitute—,
in sub-paragraph (3), in the words before paragraph (a), for “During” substitute “In respect of”,
in paragraphs (a) and (b) of that sub-paragraph, for “VAT credit”, in each place it occurs, substitute “relevant amount”, and
An amount of repayment interest that— may be recovered from the person as if it were late payment interest.
Part 2 of Schedule 54A to FA 2009 has effect, and is to be deemed always to have had effect, with the amendments made by subsection (4).
Part 4 of FA 2004 (pension schemes) is amended as follows.
In section 169(1F) (recognised transfers), for “of a CMP-derived drawdown pension” substitute of—
In section 169(1G), for “held for the purposes of a CMP-derived drawdown pension” substitute “within paragraph (a) of that subsection”.
In section 279 (other definitions) omit subsection (1F).
In section 280 (abbreviations and general index), in subsection (2) omit the entry for “CMP-derived drawdown pension”.
In Schedule 29 (authorised lump sums - supplementary), in paragraph 1 (pension commencement lump sums)—
in sub-paragraph (1)(c), at the end insert “, and”;
omit sub-paragraph (1)(f) and the “and” before it;
omit sub-paragraph (4A).
In Schedule 29, in paragraph 3C (pension commencement excess lump sum), in sub-paragraph (4) omit paragraph (b) and the “or” before it.
In this Act the following abbreviations are references to the following Acts— CTA 2009 Corporation Tax Act 2009 CTA 2010 Corporation Tax Act 2010 FA followed by a year Finance Act of that year IHTA 1984 Inheritance Tax Act 1984 ITA 2007 Income Tax Act 2007 ITEPA 2003 Income Tax (Earnings and Pensions) Act 2003 TCGA 1992 Taxation of Chargeable Gains Act 1992 VATA 1994 Value Added Tax Act 1994
This Act may be cited as the Finance (No. 2) Act 2024.