Labour financial policies 2024 focus on changes to inheritance tax, capital gains tax, and mortgages, aiming to create a fairer tax system and support first-time homebuyers.
Labour Financial Policies 2024
Labour financial policies 2024 have become a significant topic of discussion as Keir Starmer’s government begins its tenure. With many people curious about what these policies mean for their savings, mortgages, and assets, it’s crucial to understand the changes Labour plans to implement. This blog post will delve into the key areas of inheritance tax, capital gains tax, and mortgages under Labour’s new leadership.
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Labour’s Promises on Income Tax, National Insurance, and VAT
One of the core commitments in Labour financial policies 2024 is the pledge not to increase any bands of income tax, National Insurance, or VAT rates over the next five years. The only exception is the introduction of VAT on private and independent school fees. This promise is designed to ensure that the majority of taxpayers will not face higher tax rates under the new administration.
State Pension ‘Triple Lock’ and Inflation
Labour financial policies 2024 also include a promise to retain the state pension ‘Triple Lock.’ This means that the state pension payout will continue to increase each year by the highest of earnings growth, price inflation, or 2.5%. Additionally, Labour aims to keep inflation at 2%, ensuring economic stability and protecting the purchasing power of the public.
Inheritance Tax Reforms
A significant aspect of Labour financial policies 2024 is the reform of inheritance tax. Labour has pledged to end non-dom status, which currently allows some residents to avoid paying UK taxes on overseas income. Instead, a modern scheme will be introduced for people genuinely in the UK for short periods. This change aims to ensure that those who make their home in the UK contribute fairly to the tax system.
Labour financial policies 2024 also target the use of offshore trusts to avoid inheritance tax. By ending these practices, Labour intends to make sure that everyone living in the UK pays their fair share of taxes.
Capital Gains Tax Adjustments
Labour financial policies 2024 include plans to address the loophole that allows salary bonuses, such as bankers’ bonuses, to be taxed as capital gains instead of income. Currently, this loophole means that big bonuses are taxed at a lower rate (28%) compared to the income tax rate for additional rate taxpayers (45%). Closing this loophole will ensure that high earners pay a fairer share of taxes.
In addition, Labour financial policies 2024 propose adding a 1% stamp duty to properties purchased by non-UK residents. This measure is intended to address the housing market’s affordability issues and generate additional revenue.
Strengthening HMRC
As part of Labour financial policies 2024, the party plans to bolster HMRC’s capacity to combat tax avoidance. By increasing resources and support for HMRC, Labour aims to ensure that tax laws are enforced effectively and that tax avoidance is minimized.
No Changes to Capital Gains Tax for Main Homes
During the election campaign, Keir Starmer assured that under Labour financial policies 2024, people selling their main homes would not be subject to capital gains tax. This assurance provides some relief to homeowners concerned about potential tax increases on their property sales.
While there are no specific pledges in Labour financial policies 2024 to raise the rate of capital gains tax or change the inheritance tax threshold (currently set at £325,000), the focus remains on ensuring a fair and equitable tax system.
Supporting First-Time Homebuyers
Labour financial policies 2024 include significant measures to support first-time homebuyers. One of the key proposals is a permanent and comprehensive mortgage guarantee scheme. This scheme aims to help first-time buyers who struggle to save for a large deposit by reducing mortgage costs and making homeownership more accessible.
Building New Homes
To address the housing shortage, Labour financial policies 2024 also focus on building new homes. By removing barriers to planning regulations, Labour aims to increase the supply of affordable housing and make it easier for people to purchase their first homes.
Fully Funded and Costed Plans
Labour financial policies 2024 emphasize that all proposed measures are fully funded and costed. Keir Starmer has assured the public that these plans do not require additional tax rises beyond those already announced. This commitment aims to provide financial stability and predictability for taxpayers.
Conclusion
Labour financial policies 2024 aim to create a fairer tax system and support economic stability. With promises to maintain current income tax, National Insurance, and VAT rates, alongside reforms in inheritance and capital gains taxes, Labour is focused on ensuring everyone pays their fair share. Additionally, measures to support first-time homebuyers and build new homes highlight Labour’s commitment to addressing housing affordability. As these policies are implemented, it’s essential to stay informed about how they might affect your financial situation.