Clarus Thought Corner : The Spring Budget 2024

As Spring (sort of) blossomed last week, it brought with it the widely anticipated Spring budget. In what was suggested as Mr. Hunt's last Budget before an election, speculation leading up to it centred on the potential trade-offs necessary between tax cuts, fiscal rules, and meeting spending commitments. Here's Simon Roughsedge's own musings on what it means for you.

The budget is always a big day for Parliament-  the house is packed and generally raucous!   Mr Hunt’s delivery this year was no less the case. 

Rather than regurgitate the main points that you will have read or seen from then news outlet of your choice, I thought I would pick up on a couple of points

Non Doms– (someone residing in the UK but who doesn’t consider the UK their permanent home) 

The government is replacing the current outdated tax regime for non-UK domiciled individuals with a ‘modernised’ residence-based regime, which essentially aims to make the UK more competitive in keeping these folks spending their money in the UK. 

Under the new regime (starting 6 April 2025), anyone who has been tax resident in the UK for more than four years will pay UK tax on their foreign income and gains, similar to other UK residents. Within this 4 year window however, individuals will not pay UK tax on any foreign income and capital gains….assuming they have been non-tax residents for the last 10 years (there are always rules!).   

And to this latter point, there are transitional rules for existing non-doms claiming the remittance basis.   

This is an interesting move to make the UK more attractive.  Will it attract the entrepreneurial spirits that the Conservatives want? Well, we will wait and see…certainly, it should help. 


The government is cutting a further 2p from the main rate of self-employed National Insurance. From 6 April 2024 the main rate of Class 4 NICs for the self-employed will now be reduced from 9% to 6%. 

However, it’s all about give and take, right? Yes, absolutely. 

The Government announced that there is a freezing of the earning thresholds at which NIC start.  So, this has the impact that more people are pulled into a tax position. 


And breathe – no announcements impacting pension taxation in the budget. Shock horror!  

We already know that the removal of the Lifetime allowance was probably one of the biggest changes to pension tax rules since 2006.  In essence the new rules replace the lifetime allowance with two new allowances that cap the amount of tax-free lump sums that can be paid in lifetime and death. 

Two main new allowances are: 

  1. An individual ‘lump sum allowance’ (LSA) set at £268,275 (a quarter of the current £1,073,100 lifetime allowance) – measuring the tax-free cash taken over someone’s lifetime 
  1. An individual ‘lump sum and death benefit allowance’ (LSDBA) set at £1,073,100 – incorporating tax-free lump sums someone takes while alive, plus any serious ill health lump sum and lump sums paid out when they die. 

There is a third part relating to Overseas Pensions – but we can cross that bridge on a different day.   

Essentially, under the old system once the Lifetime allowance of £1,073,100 (ish….depending on Pension protections) was breached there would be an excess charge of either 55% or 25% on top of income tax.  The new system removes the excess charge and instead sees any excess taxed at the individual’s highest marginal income tax rate. 

Of course, there are nuances and complications, but hopefully, this gives you a flavour of this particular gravy train. 

High Income Child Benefit Charge (HICBC) 

Currently, a couple each earning up to £49,999 does not incur the charge, whereas a couple (or single person) with one income of £50,000 or more does incur the charge. From 6th April 2024 the income threshold will be changed from £50,000 to £60,000 and in an attempt to further remove the unfairness here, the Government will be consulting on plans to move to a system based on household rather than individual incomes by April 2026. 

This means Child Benefit will not be withdrawn in full until the highest-earning individual earns £80,000 or higher. 

The potentially frustrating UK ISA 

I have to admit, this baffles me.  Why?  What is the real benefit? 

Yes, ‘you’ get an extra £5k to allocate to a vehicle that is free from Income Tax and Capital Gains Tax….but you need to invest purely in British shares.   

On one level the UK market is made up of companies that generate income from all over the world, in many different currencies and assets.  But they are still bound by UK rules, economics and Government legislation etc. 

However, there is also potential for the UK ISA to hold UK Government bonds…..detracting from UK companies the Government is wanting to bolster. So, its hard to follow the reasoning. 

Overall, the number of people able to fully utilise the ISA allowance of £20,000 is relatively small, so does this actually only benefit those with more disposable means (for example, according to M&G’s paper ’The Big Book of ISA’ in September 2023, only 15% of subscribers use their full allowance)? 

However, my niggle comes down to diversification.  The UK position on the world GDP stage is relatively small.  Therefore, my concerns surround the potential implications of Global diversification and sensible balance therefore in any investment portfolio.  Focusing on the UK will not take long for a portfolio to potentially become Home Country Biased.  

We need to wait for the consultation to know more, but at this moment, I have the colleywobbles about it. 

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