40 Remittance basis not available after tax year 2024-25
(1) Amendments made by paragraph 1 of Schedule 9 have the effect that the remittance basis is not available for tax year 2025-26, or for subsequent tax years.
(2) But provisions relating to the remittance of income and gains will continue to have effect in relation to income and gains subject to the remittance basis in previous tax years.
(3) Other provision is made by that Schedule (including provision amending the Income Tax Acts and TCGA 1992)—
(a) in consequence of ending the availability of the remittance basis,
(b) clarifying the circumstances in which amounts are remitted (see paragraph 5), and
(c) in connection with otherwise ending the relevance of domicile to income tax and capital gains tax.
(4) Subject to subsections (5) and (6), the provision made by that Schedule has effect for the tax year 2025-26 and subsequent tax years.
(5) Paragraph 6 of Schedule 9 (relief for amounts remitted again on becoming UK resident) is to be treated as having always had effect.
(6) The amendments made by paragraphs 9 and 10 of Schedule 9 (residence of personal representatives) have effect where the deceased person died on or after 6 April 2025.
(1) Schedule 12 amends legislation relating to the taxation of income and gains arising within trusts and similar structures, and in particular—
(a) contains amendments connected with the introduction of relief for qualifying new residents and the abolition of the remittance basis of taxation (see Chapters 1 and 2), and
(b) removes certain protections for foreign-source income and gains that have been available since the tax year 2017-18 while making transitional provision in respect of income that arose in past tax years.
(2) In that Schedule—
Part 1 amends Chapter 5 of Part 5 of ITTOIA 2005 (settlements: amounts treated as income of settlor or family);
Part 2 amends Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad);
Part 3 amends Chapter 2 of Part 3 of TCGA 1992 (settlements: chargeable gains) and other provisions of TCGA 1992 relating to trusts and similar structures;
Part 4 contains provision about commencement and transitional provision.
44 Excluded property: domicile test replaced with long-term residence test
(1) IHTA 1984 is amended as follows.
(2) In section 6 (excluded property), in subsections (1) and (1A), for “domiciled outside the United Kingdom” substitute “who is not a long-term UK resident”.
(3) After section 6 insert—
“Long-term UK resident”: individuals
6A (1) For the purposes of this Act, an individual is a “long-term UK resident” at all times in a tax year if they were UK resident for at least 10 of the previous 20 tax years.
(2) But an individual is not a long-term UK resident at any time in a tax year (“the current tax year”) if they were non-UK resident—
(a) for any 10 consecutive tax years during the 19 tax years before the current tax year, or
(b) for at least the required number of consecutive tax years ending with the tax year before the current tax year.
(3) To determine “the required number” for the purposes of subsection (2)(b), take the 20 tax years ending with the last tax year for which the individual was UK resident and find the number of those tax years for which the individual was UK resident (“the number of resident years”).
The required number is the number in the second column of the following table corresponding to the number of resident years.
Number of resident years | Required number
13 or less | 3
14 | 4
15 | 5
16 | 6
17 | 7
18 | 8
19 | 9
20 | 10
(4) In this section, “UK resident” means resident in the United Kingdom and “non-UK resident” means not resident in the United Kingdom.
(5) For the purposes of this section, a question as to whether the individual was UK resident for the tax year 2012-13 or an earlier tax year is to be determined as it would have been determined for income tax purposes for that tax year (and as to later tax years see Schedule 45 to the Finance Act 2013 (statutory residence test)).
(6) See also—
(a) section 6B (which modifies this section in its application to young persons);
(b) sections 267ZC to 267ZE (under which a person may be treated as a long-term UK resident as the result of an election).
“Long-term UK resident”: young persons
6B (1) In the application of section 6A(1) for the purpose of determining whether a young person is a long-term UK resident at any time in a tax year (“the current tax year”), that subsection has effect as if—
(a) for “20” there were substituted the number of whole tax years for which the person was alive before the current tax year, and
(b) for “10” there were substituted half the number mentioned in paragraph (a) (rounded up, if not a whole number, to the next whole number).
(2) In subsection (1), “young person” means an individual who was under the age of 20 immediately before the current tax year.
(3) For the purposes of this Act, an individual is not a long-term UK resident at any time in a tax year if they were under the age of 1 (or were not yet born) immediately before the tax year.
“Long-term UK resident”: bodies corporate
6C For the purposes of this Act, a body corporate is a “long-term UK resident” at all times in a tax year if the body—
(a) is incorporated in the United Kingdom, or
(b) was (if in existence before the beginning of the tax year) within the charge to corporation tax on income at any time during the previous tax year by virtue of section 5(1) of the Corporation Tax Act 2009 (UK resident companies).
(4) This section comes into force on 6 April 2025.
(1) IHTA 1984 is amended as follows.
(2) In section 48 (excluded property)—
(a) in the heading, at the end insert “: reversionary interests and Treasury securities”;
(b) omit subsections (3) to (3F).
(3) After section 48 insert—
Excluded property: property situated outside the UK etc
48ZA (1) If property comprised in a settlement—
(a) is situated outside the United Kingdom, or
(b) is a holding in an authorised unit trust or a share in an open-ended investment company,
this section applies to the property and section 6(1) and (1A) (general excluded property rule) does not.
(2) If the settlor is alive, the property is excluded property at any time when the settlor is not a long-term UK resident.
(3) If the settlor died on or after 6 April 2025, the property is excluded property if the settlor was not a long-term UK resident immediately before they died.
(4) If the settlor died before 6 April 2025, the property is excluded property if the settlor was not domiciled in the United Kingdom when the property became comprised in the settlement.
(5) Subsections (2) and (3) do not apply at any time to property to which section 49(1) (certain interests in possession) applies if, at that time, the person beneficially entitled to the interest is a long-term UK resident.
(6) Subsections (2) to (4) do not apply to property if—
(a) an individual has been beneficially entitled to an interest in possession in the property—
(i) at any time on or after 6 April 2025 while a long-term UK resident, or
(ii) at any time before that date while domiciled in the United Kingdom, and
(b) the entitlement arose directly or indirectly as a result of a disposition made on or after 5 December 2005 for a consideration in money or money's worth.
(7) For the purposes of subsection (6)—
(a) it is immaterial whether the consideration was given by the individual or by anyone else, and
(b) the cases in which an entitlement arose indirectly as a result of a disposition include any case where the entitlement arose under a will or the law relating to intestacy.
(8) Where the conditions in paragraphs (a) to (d) of section 74A(1) (arrangements involving acquisition of interest in settled property etc) are satisfied, none of subsections (2) to (4) applies at the time when the conditions are first satisfied or at any later time to make the relevant settled property (within the meaning of section 74A) excluded property.
(9) If—
(a) an amount is payable in respect of property (“the existing property”) comprised in a settlement, and
(b) the amount represents an accumulation of income which (once accumulated) becomes comprised in the settlement,
subsection (4) has effect in the case of the amount as if the reference to the time when it became comprised in the settlement were to the time when the existing property became comprised in the settlement.
(10) Subsections (2) to (4) are subject to Schedule A1 (overseas property with value attributable to UK residential property).
(11) The reference in subsection (1) to property comprised in a settlement does not include a reversionary interest in the property (and accordingly this section does not apply to such an interest and section 6(1) does).
(4) This section comes into force on 6 April 2025.
46 Consequential, connected and transitional provision
In Schedule 13—
Part 1 contains amendments to IHTA 1984 and related legislation that are consequential on, connected with or incidental to the new excluded property tests introduced by sections 44 and 45;
Part 2 contains provision about commencement and transitional provision.
(1) VATA 1994 is amended as follows.
(2) In Schedule 9 (exemptions)—
(a) in Group 6 (education)—
(i) in item 3(b)(i), after “5A” insert “(or would be so exempt but for item 1 or 2 of Part 3)”;
(ii) in item 4, after “item 1” insert “(whether or not that supply also falls within item 1 or 2 of Part 3)”;
(b) after Part 2 (the groups) insert—
Part 3 Exceptions
Item No.
Notes: A “private school” means an institution which is either— a school— at which full-time education is provided for pupils of compulsory school age or, in Scotland, school age (whether or not such education is also provided for pupils under or over that age), where fees or other consideration are payable for that provision of full-time education, and which is not a nursery school, or an institution— which is wholly or mainly concerned with providing education suitable to the requirements of persons over compulsory school age (or, in Scotland, school age) but under 19, at which full-time education is provided for such persons, where the provision of full-time education falling within sub-paragraph (ii) is wholly or mainly provision in respect of which fees or other consideration are payable, and which is not an independent training or learning provider. In Note (1)(b) an “independent training or learning provider” means an institution— at which education or training is provided for persons over compulsory school age (or, in Scotland, school age) but under 19 under a contract with a relevant contracting authority, and where the consideration for the provision falling within paragraph (a) is payable by the relevant contracting authority under that contract. For the purposes of Note (2), a “relevant contracting authority” means the Secretary of State, Medr (Commission for Tertiary Education and Research), the Department for the Economy in Northern Ireland or Skills Development Scotland. For the purposes of items 1 and 2, the provision of education or vocational training at a private school by any eligible body other than a private school is to be treated as provision by a private school if— the eligible body and that private school are connected within the meaning of section 1122 of the Corporation Tax Act 2010 (connected persons), or the provision by the eligible body is a result of arrangements the main purpose, or one of the main purposes, of which is to secure that the provision is an exempt supply. For the purposes of Note (4)— “arrangements” include any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and an “eligible body” has the meaning given by Note (1) to Group 6. For the purposes of item 1— a “nursery class” means a class that is composed wholly (or almost wholly) of children who— are under compulsory school age or, in Scotland, school age, and would not be expected to attain that age while in that class, and a “higher education course”— in relation to England and Wales, has the meaning given by section 83(1) of the Higher Education and Research Act 2017; in relation to Scotland, means a course of any description mentioned in section 5(3) of the Further and Higher Education (Scotland) Act 2005; in relation to Northern Ireland, means a course of any description mentioned in paragraph 1 of Schedule 1 to the Further Education (Northern Ireland) Order 1997 (S.I. 1997/1772 (N.I. 15)). For the purposes of item 2 “vocational training” has the meaning given by Note (3) to Group 6. In these Notes, “compulsory school age”, “pupil”, “school” and “school age” have the meanings given by the Education Act 1996, the Education (Scotland) Act 1980 and the Education and Libraries (Northern Ireland) Order 1986 (S.I. 1986/594 (N.I. 3)) in relation to England and Wales, Scotland and Northern Ireland respectively.
1 | The provision of education by a private school, other than— the provision of the teaching of English as a foreign language, the provision of education in a nursery class, or the provision of a higher education course.
2 | The provision of vocational training by a private school.
3 | The provision of board and lodging which is closely related to a supply of a description falling within item 1 or 2.
(3) In section 31 (exempt supplies), in subsection (1), for “Schedule 9” substitute “Part 2 of Schedule 9 and it is not of a description specified in Part 3 of that Schedule”.
(4) In section 8 (reverse charge on supplies received from abroad), in subsection (4A), for “Schedule 9” substitute “Part 2 of Schedule 9 and not specified in Part 3 of that Schedule”.
(5) In section 43 (groups of companies), in subsection (2A)—
(a) in paragraph (b), for “Schedule 9” substitute “Part 2 of Schedule 9 or are within any of the descriptions specified in Part 3 of that Schedule”;
(b) in paragraph (c) for “Schedule 9” substitute “Part 2 of Schedule 9 or which do fall within any of the descriptions specified in Part 3 of that Schedule”.
(1) Subsection (2) applies to the provision of education services during a school term if a payment in respect of the services was received by the person providing the services on or after 29 July 2024 and before 30 October 2024.
(2) That provision is treated for the purposes of the charge to VAT as a supply taking place on the later of—
(a) 1 January 2025, and
(b) the first day of that term.
Accordingly, that provision is not to be regarded (as a result of provision made by or under VATA 1994) as a supply taking place at any other time.
(3) But subsection (2) does not apply to the provision of education services by a school if the school is approved under section 342 of the Education Act 1996 (approval of non-maintained special schools).
(4) In this section “the provision of education services” means a provision of education, vocational training or board and lodging falling within Part 3 of Schedule 9 (exceptions).
(5) This section is to be read as if it were contained in VATA 1994.
(1) Sections 47 and 48 are to be treated as having come into force on 30 October 2024 and have effect in relation to any provision of education, vocational training or board and lodging on or after 1 January 2025 (whenever that supply is treated as taking place for the purposes of the charge to VAT).
50 Increased rates for additional dwellings: transactions before 1 April 2025
(1) Section 1 of the Stamp Duty Land Tax (Temporary Relief) Act 2023 (which provides for reduced rates of stamp duty land tax for transactions before 1 April 2025) is amended as follows.
(2) In subsection (3) (which deals with purchases of additional dwellings), for the Table A mentioned there substitute—
TABLE A: RESIDENTIAL
Part of relevant consideration | Percentage
So much as does not exceed £250,000 | 5%
So much as exceeds £250,000 but does not exceed £925,000 | 10%
So much as exceeds £925,000 but does not exceed £1,500,000 | 15%
The remainder (if any) | 17%
.
(3) The amendment made by this section has effect in relation to land transactions the effective date of which falls on or after 31 October 2024 but before 1 April 2025.
(4) But the amendment made by this section does not have effect in relation to a land transaction which—
(a) is effected in pursuance of a contract entered into before 31 October 2024, and
(b) is not excluded.
(5) For this purpose a land transaction is excluded if—
(a) there is any variation of the contract, or assignment of rights under the contract, on or after 31 October 2024,
(b) the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or
(c) on 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.
(6) This section also needs to be read with section 52 (which deals with cases where a contract has been substantially performed before the change in rates made by this section etc).
51 Increased rates for additional dwellings: transactions on or after 1 April 2025
(1) In Schedule 4ZA to FA 2003 (higher rates of stamp duty land tax for additional dwellings etc), for the Table A in section 55(1B) mentioned in paragraph 1(2) substitute—
TABLE A: RESIDENTIAL
Part of relevant consideration | Percentage
So much as does not exceed £125,000 | 5%
So much as exceeds £125,000 but does not exceed £250,000 | 7%
So much as exceeds £250,000 but does not exceed £925,000 | 10%
So much as exceeds £925,000 but does not exceed £1,500,000 | 15%
The remainder (if any) | 17%
.
(2) The amendment made by this section has effect in relation to land transactions the effective date of which falls on or after 1 April 2025.
(3) But the amendment made by this section does not have effect in relation to a land transaction which—
(a) is effected in pursuance of a contract entered into before 31 October 2024, and
(b) is not excluded.
(4) For this purpose a land transaction is excluded if—
(a) there is any variation of the contract, or assignment of rights under the contract, on or after 31 October 2024,
(b) the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or
(c) on 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.
(5) This section also needs to be read with section 52 (which deals with cases where a contract has been substantially performed before the change in rates made by this section etc).
52 Contracts substantially performed before relevant rate change
(1) The Stamp Duty Land Tax (Temporary Relief) Act 2020 is amended as follows.
(2) In section 1 (reduced rates of SDLT in relation to land transactions the effective date of which falls in the period beginning with 8 July 2020 and ending with 30 June 2021)—
(a) in subsection (6) (which provides an exception from section 44(8) of FA 2003 where the contract is completed after 30 June 2021), for the words from “that the modifications” to the end substitute “the reason given by subsection (6A)”, and
(b) after subsection (6) insert—
(6A) For this purpose, the sole reason is either—
(a) that the modifications made by this section have no effect in relation to that conveyance, or
(b) that both paragraph (a) applies and the increased rates provided for by section 50 or 51 of the Finance Act 2025 would have had effect in relation to that conveyance.
(3) In section 1A (reduced rates of SDLT in relation to land transactions the effective date of which falls in the period beginning with 1 July 2021 and ending with 30 September 2021)—
(a) in subsection (5) (which provides an exception from section 44(8) of FA 2003 where the contract is completed after 30 September 2021), for the words from “that the modifications” to the end substitute “the reason given by subsection (5A)”, and
(b) after subsection (5) insert—
(5A) For this purpose, the sole reason is either—
(a) that the modifications made by this section have no effect in relation to that conveyance, or
(b) that both paragraph (a) applies and the increased rates provided for by section 50 or 51 of the Finance Act 2025 would have had effect in relation to that conveyance.
(4) In section 1 of the Stamp Duty Land Tax (Temporary Relief) Act 2023 (reduced rates of SDLT in relation to land transactions the effective date of which falls in the period beginning with 23 September 2022 and ending with 31 March 2025)—
(a) in subsection (6) (which provides an exception from section 44(8) of FA 2003 where the contract is completed after 31 March 2025), for the words from “that the modifications” to the end substitute “the reason given by subsection (6A)”, and
(b) after subsection (6) insert—
(6A) For this purpose, the sole reason is either—
(a) that the modifications made by subsections (2) to (5) have no effect in relation to that conveyance, or
(b) that both paragraph (a) applies and the increased rates provided for by section 51 of the Finance Act 2025 would have had effect in relation to that conveyance.
(5) In a case where—
(a) as a result of section 44(4) of FA 2003 the effective date of a land transaction is before 31 October 2024, and
(b) the contract concerned is completed by a conveyance on or after that date,
section 44(8) of that Act is not to apply in relation to that conveyance if the sole reason that (but for this subsection) it would have applied is that the increased rates provided for by section 50 or 51 of this Act would have had effect in relation to that conveyance.
(6) Section 44(10) of FA 2003 applies for the purposes of subsection (5).
(1) In—
(a) paragraph 3(1)(a) of Schedule 4A to FA 2003 (higher rate of SDLT for purchases by companies etc), and
(b) step 4 in section 74(1A) of FA 2003 (exercise of collective rights by tenants of flats where condition in paragraph 3(3) of that Schedule is met),
for “15%” substitute “17%”.
(2) The amendments made by this section have effect in relation to land transactions the effective date of which falls on or after 31 October 2024.
(3) But the amendments made by this section do not have effect in relation to a land transaction which—
(a) is effected in pursuance of a contract entered into before that date, and
(b) is not excluded.
(4) For this purpose a land transaction is excluded if—
(a) there is any variation of the contract, or assignment of rights under the contract, on or after 31 October 2024,
(b) the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or
(c) on 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.
(5) In a case where—
(a) as a result of section 44(4) of FA 2003 the effective date of a land transaction is before 31 October 2024, and
(b) the contract concerned is completed by a conveyance on or after that date,
section 44(8) of that Act is not to apply in relation to that conveyance if the sole reason that (but for this subsection) it would have applied is that the increased rates provided for by this section would have had effect in relation to that conveyance.
(6) Section 44(10) of FA 2003 applies for the purposes of subsection (5).
54 Alternative finance: land in England, Scotland or Northern Ireland
(1) In section 157 of FA 2013 (land in England or Northern Ireland sold to financial institution and leased to person under alternative finance arrangements)—
(a) in subsection (2), for “If the lessee is a company, this Part” substitute “This Part”;
(b) in subsection (4), after “company” (in each place it appears) insert “or individual”;
(c) in subsection (9), after “subsections” insert “(2), (3),”.
(2) In section 157A of FA 2013 (land in Scotland sold to financial institution and leased to person under alternative finance arrangements)—
(a) in subsection (4), for “If the lessee is a company, this Part” substitute “This Part”;
(b) in subsection (6), after “company” (in each place it appears) insert “or individual”;
(c) in subsection (11), after “subsections” insert “(4), (5),”.
(3) The amendments made by this section are treated as having come into force on 30 October 2024.
(1) In section 157 of FA 2013, in the heading and subsection (1)(b), omit “, Wales”.
(2) After section 157A of FA 2013 insert—
Land in Wales sold to financial institution and leased to person
157B (1) This section applies where—
(a) paragraph 2 of Schedule 10 to the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (anaw 1) (land in Wales sold to financial institution and leased to person) applies in relation to arrangements entered into between a financial institution and another person (“the lessee”), and
(b) the land in which the institution purchases a major interest under the first transaction is in Wales and consists of or includes one or more dwellings (or parts of a dwelling).
(2) This Part has effect in relation to times when the arrangements are in operation as if—
(a) the interest held by the financial institution as mentioned in subsection (3)(b) were held by the lessee (and not by the financial institution), and
(b) the lease or sub-lease granted under the second transaction had not been granted.
(3) The reference in subsection (2) to times when the arrangements are in operation is to times when—
(a) the lessee holds the leasehold interest granted to it under the second transaction, and
(b) the interest purchased under the first transaction (or that interest except so far as transferred by a further transaction) is held by a financial institution.
(4) A company or individual treated under subsection (2)(a) as holding an interest at a particular time is treated as holding it as a member of a partnership if at the time in question the company or individual holds the leasehold interest as a member of the partnership (and this Part has effect accordingly in relation to the other members of the partnership).
(5) In relation to times when the arrangements operate for the benefit of a collective investment scheme, this Part has effect as if—
(a) the interest held by the financial institution as mentioned in subsection (6)(b) were held by the lessee for the purposes of a collective investment scheme (and were not held by the financial institution), and
(b) the lease or sub-lease granted under the second transaction had not been granted.
(6) The reference in subsection (5) to times when the arrangements operate for the benefit of a collective investment scheme is to times when—
(a) the lessee holds the leasehold interest for the purposes of a collective investment scheme, and
(b) the interest purchased under the first transaction (or that interest except so far as transferred by a further transaction) is held by a financial institution.
(7) In this section—
“financial institution” has the meaning given by paragraph 8 of Schedule 10 to the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017;
“the first transaction” has the same meaning as in paragraph 2 of Schedule 10 to that Act;
“further transaction” has the same meaning as in paragraph 2 of Schedule 10 to that Act;
“the leasehold interest” means the interest granted to the lessee under the second transaction;
“the second transaction” has the same meaning as in paragraph 2 of Schedule 10 to the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017.
(8) The reference in subsection (1) to a major interest in land is to be read in accordance with section 68 of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017.
(9) Where the lessee is an individual, references in subsections (2), (3), (5) and (6) to the lessee are to be read, in relation to times after the death of the lessee, as references to the lessee’s personal representatives.
(3) The amendments made by this section are treated as having come into force on 30 October 2024.
(1) The Treasury may by regulations make provision about stamp duty or stamp duty reserve tax in connection with regulations made under section 13 of the Financial Services and Markets Act 2023 (testing of FMI technologies or practices).
(2) Regulations under subsection (1) may—
(a) disapply, or modify the application of, an Act;
(b) apply an Act with or without modifications,
but may not amend or repeal an Act.
(3) Regulations under subsection (1) must be made by statutory instrument.
(4) A statutory instrument containing provision (whether alone or with other provision) that has the effect of increasing the amount of duty or tax that is chargeable in respect of any instrument, transfer or agreement to transfer above the amount that would have been chargeable in the absence of regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by resolution of, the House of Commons.
(5) A statutory instrument that does not contain such provision is subject to annulment in pursuance of a resolution of the House of Commons.
57 Rate bands etc for tax years 2028-29 and 2029-30
In section 86 of FA 2021 (no indexation of rate bands, residential enhancement and taper threshold for tax years up to 2027-28)—
(a) for “or 2026” substitute “, 2026, 2027 or 2028”, and
(b) in the heading, for “2027-28” substitute “2029-30”.
58 EBTs: prohibition on applying property for benefit of participators etc
(1) IHTA 1984 is amended as follows.
(2) In section 13 (dispositions by close companies for benefit of employees), in subsection (2)—
(a) in paragraph (a), after “who is” insert “, at the time of the disposition,”;
(b) in paragraph (b), after “who is” insert “, at the time of the disposition,”;
(c) in paragraph (c), for “has been” substitute “is”;
(d) in paragraph (d), after “who is” insert “, at the time of the disposition or any later time,”.
(3) In section 28 (employee trusts), in subsection (4)—
(a) for paragraph (a) substitute—
(a) a person who is, at the time of the transfer of value mentioned in subsection (1), a participator in the company mentioned in that subsection; or
;
(b) in paragraph (b), after “who is” insert “, at the time of the transfer of value mentioned in subsection (1),”;
(c) in paragraph (c), for “has been” substitute “is”;
(d) for paragraph (d) substitute—
(d) any person who is, at the time of the transfer of value mentioned in subsection (1) or any later time, connected with a person within paragraph (a), (b) or (c).
.
59 EBTs: restriction on proportion of beneficiaries who may be participators etc
(1) IHTA 1984 is amended as follows.
(2) In section 13 (dispositions by close companies for benefit of employees), after subsection (4) insert—
(4A) Subsection (4)(a) does not apply if, immediately after the disposition of property mentioned in subsection (1), more than 25% of relevant beneficiaries are (disregarding subsection (4)(a)) persons falling within subsection (2)(a) to (d).
(4B) In subsection (4A) “relevant beneficiary” means a person who—
(a) is a person for whose benefit the trusts permit the property to be applied, and
(b) is a person employed by or holding office with the company mentioned in subsection (1).
.
(3) In section 28 (employee trusts), after subsection (6) insert—
(6A) Subsection (6) does not apply if, immediately after the transfer of value mentioned in subsection (1), more than 25% of relevant beneficiaries are (disregarding subsection (6)) persons falling within subsection (4)(a) to (d).
(6B) In subsection (6A) “relevant beneficiary” means a person who—
(a) is a person for whose benefit the trusts permit the settled property to be applied, and
(b) is a person employed by or holding office with the company mentioned in subsection (1).
.
(4) In section 75 (exemption from charge under section 65 where property becomes subject to employee benefit trust), in subsection (3), in the opening words, after “section 28(4)” insert “and (6A)”.
(5) This section is treated as having come into force on 30 October 2024.
60 EBTs: shares entering trust to have been held for two years
(1) IHTA 1984 is amended as follows.
(2) In section 28 (employee trusts)—
(a) in subsection (1), after paragraph (b) insert
, and
(c) the individual has, throughout the period of two years ending with the date of the transfer, been beneficially entitled to the shares in or securities of the company that become comprised in the settlement.
;
(b) after subsection (7) insert—
(8) A reference in subsection (1)(c) to shares in or securities of a company includes, in a case in which a reorganisation of share capital has occurred, the original shares to which the new holding relates.
(9) In subsection (8)—
(a) “reorganisation of share capital” means a transaction to which section 127 of the 1992 Act (equation of original shares and new holding) applies or would apply but for section 134 of that Act;
(b) “the original shares” and “the new holding” have the meaning given by section 126(1) of the 1992 Act.
.
(3) In section 75 (exemption from charge under section 65 where property becomes subject to employee benefit trust)—
(a) in subsection (2), after paragraph (c) insert
; and
(d) the shares in or securities of the company have been comprised in the settlement mentioned in section 65(1) throughout the period of two years ending with the date on which they cease to be relevant property.
;
(b) after subsection (3) insert—
(4) A reference in subsection (2)(d) to shares in or securities of a company includes, in a case in which a reorganisation of share capital has occurred, the original shares to which the new holding relates.
(5) In subsection (4)—
(a) “reorganisation of share capital” means a transaction to which section 127 of the 1992 Act (equation of original shares and new holding) applies or would apply but for section 134 of that Act;
(b) “the original shares” and “the new holding” have the meaning given by section 126(1) of the 1992 Act.
.
(4) This section is treated as having come into force on 30 October 2024.
(1) In Chapter 2 of Part 5 of IHTA 1984 (agricultural property relief), omit section 124C (application of agricultural property relief to land in habitat schemes) and insert—
Environmental management agreements
124C (1) For the purposes of this Chapter, land is to be treated as agricultural property occupied for the purposes of agriculture if—
(a) the land was agricultural property throughout the period of two years ending with the day on which it became subject to an environmental management agreement, and
(b) since that day, it has been used and managed in accordance with the agreement (whether or not the agreement is still in place).
(2) A building occupied with land that is treated as agricultural property occupied for the purposes of agriculture under subsection (1) is to be treated in the same way if—
(a) it is used in connection with the use and management of the land in accordance with the environmental management agreement (whether or not the agreement is still in place) and is of a character appropriate to the land,
(b) either—
(i) it was built for the purpose of being used in connection with that use and management (whether or not the agreement was still in place), or
(ii) it was occupied with the land immediately before the land became subject to the environmental management agreement and was of a character appropriate to the land as it stood at that time, and
(c) it is not otherwise agricultural property occupied for the purposes of agriculture.
(3) For the purposes of subsection (2), where a building is occupied with land that is treated as agricultural property under subsection (1) and land that is otherwise agricultural property occupied for the purposes of agriculture, the question of whether the building is of a character appropriate to the land is to be considered by reference to all of that land.
(4) The agricultural value of property that is agricultural property as a result of this section is to be taken to be the value that would be the value of the property if it were subject to a perpetual covenant prohibiting its use otherwise than in accordance with the environmental management agreement (whether or not the agreement is still in place) (and section 115(3) does not apply).
(5) In subsection (1)(a) the reference to agricultural property includes land treated as agricultural property under this section.
(6) In this section—
“environmental management agreement” means a legally enforceable agreement between an occupier or other person with a right in land and a public authority which—
is entered into for the purpose of protecting, restoring or enhancing the natural environment, or natural resources, of land or water, and
in practice requires the land to be used and managed in a way that would (apart from this section) prevent it from being agricultural property occupied for the purposes of agriculture;
“land” includes pasture and woodland;
“public authority” means a person that is in entering the environmental management agreement—
exercising public functions, or
acting under arrangements with a public authority in relation to the exercise of the authority’s functions.
(7) This section does not apply in respect of an environmental management agreement that ended before 6 March 2024.
(2) The amendments made by this section have effect—
(a) in relation to transfers of value made on or after 6 April 2025, and
(b) in relation to occasions on or after that date on which tax falls to be charged under Chapter 3 of Part 3 of IHTA 1984.
62 National Savings Bank: statements from HMRC no longer to be required
(1) In the National Savings Regulations 2015 (S.I. 2015/623), omit regulation 55 (inheritance tax chargeable on death of depositors).
(2) In the National Savings (No. 2) Regulations 2015 (S.I. 2015/624), omit regulation 90 (inheritance tax chargeable on death of holders of stock or certificates).
64 Abolition of duty stamps for alcoholic products
(1) Section 112 of, and Schedule 12 to, F(No.2)A 2023 (which make provision about duty stamps for retail containers of alcoholic products) are repealed.
(2) In consequence of the repeals made by subsection (1)—
(a) in section 12(2) of FA 1994, omit paragraph (ca),
(b) in section 13A(2) of that Act—
(i) in paragraph (ea), omit sub-paragraph (ii) and the “or” before it, and
(ii) omit paragraphs (f) and (g),
(c) in paragraph 1 of Schedule 41 to FA 2008, in the Table, omit the entry relating to alcohol duty and duty stamps,
(d) in section 119 of F(No.2)A 2023—
(i) omit subsection (4), and
(ii) in subsections (5) and (8)(a), omit “or subsection (4)”,
(e) in Schedule 11 to that Act, omit paragraph 1(4),
(f) in Schedule 13 to that Act, omit paragraph 9,
(g) in the form of United Kingdom Internal Accompanying Document, set out in Schedule 4 to the Excise Warehousing (Etc.) Regulations 1988 (S.I. 1988/809), in the explanatory note to Box 18a, omit the sentence beginning “If alcohol or alcoholic beverages are stamped”,
(h) the Duty Stamps Regulations 2006 (S.I. 2006/202) are revoked.
(3) In consequence of the revocation of the Duty Stamps Regulations 2006 the following are revoked—
(a) paragraphs 3 and 4 of Schedule 2 to the Finance Act 2008, Schedule 40 (Appointed Day, Transitional Provisions and Consequential Amendments) Order 2009 (S.I. 2009/571),
(b) paragraphs 20 and 21 of Schedule 2 to the Excise Goods (Holding, Movement and Duty Point) Regulations 2010 (S.I. 2010/593),
(c) paragraph 49 of Schedule 3 to the Tribunals, Courts and Enforcement Act 2007 (Consequential Amendments) Order 2012 (S.I. 2012/2404),
(d) regulation 4 of the Spirits (Amendment) Regulations 2013 (S.I. 2013/1229),
(e) regulations 8 to 18 and 23 of the Excise Duties (Miscellaneous Amendments) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/15),
(f) regulations 95 and 97 of the Excise Duties (Northern Ireland Miscellaneous Modifications and Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1559),
(g) regulations 13, 17 and 26 of the Travellers’ Allowances and Miscellaneous Provisions (EU Exit) Regulations 2020 (S.I. 2020/1412),
(h) regulation 7 of the Excise Duties (Removal of Alcoholic Liquor to Northern Ireland and Miscellaneous Amendments) Regulations 2021 (S.I. 2021/1282),
(i) Part 2 of Schedule 2 to the Excise Duties and Value Added Tax (Northern Ireland) (Miscellaneous Modifications and Amendments) Regulations 2023 (S.I. 2023/64), and
(j) paragraph 10 of the Schedule to the Finance (No. 2) Act 2023, Part 2 (Alcohol Duty) (Appointed Day, Savings, Consequential Amendments and Transitional Provisions) Regulations 2023 (S.I. 2023/884).
(4) The amendments made by this section come into force on 1 May 2025.
(5) Where before that date a person incurs an obligation under the Duty Stamps Regulations 2006 (S.I. 2006/202) to take any steps, no requirement to take those steps continues on or after that date (despite section 16 of the Interpretation Act 1978).
(6) But subsection (5) does not apply to any obligation to preserve records made for the purposes of those regulations.
(1) In Schedule 1 to TPDA 1979 (table of rates of tobacco products duty), for the Table substitute—
TABLE
1 Cigarettes | An amount equal to the higher of— 16.5% of the retail price plus £334.58 per thousand cigarettes, or £446.67 per thousand cigarettes.
2 Cigars | £417.33 per kilogram
3 Hand-rolling tobacco | £476.83 per kilogram
4 Other smoking tobacco and chewing tobacco | £183.49 per kilogram
5 Tobacco for heating | £343.91 per kilogram
.
(2) In consequence of the provision made by subsection (1), in Schedule 2 to the Travellers’ Allowances Order 1994 (which provides in certain circumstances for a simplified calculation of excise duty on goods brought into Great Britain)—
(a) in the entry relating to cigarettes, for “£422.80” substitute “£446.67”,
(b) in the entry relating to hand rolling tobacco, for “£412.32” substitute “£476.83”,
(c) in the entry relating to other smoking tobacco and chewing tobacco, for “£173.68” substitute “£183.49”,
(d) in the entry relating to cigars, for “£395.03” substitute “£417.33”,
(e) in the entry relating to cigarillos, for “£395.03” substitute “£417.33”, and
(f) in the entry relating to tobacco for heating, for “£97.66” substitute “£103.17”.
(3) The amendments made by this section are treated as having come into force at 6pm on 30 October 2024.
66 Rates of vehicle excise duty for light passenger or light goods vehicles etc
(1) Schedule 1 to VERA 1994 (annual rates of vehicle excise duty) is amended as follows.
(2) In paragraph 1 (general rate)—
(a) in sub-paragraph (2) (vehicle not covered elsewhere in Schedule with engine cylinder capacity exceeding 1,549cc), for “£345” substitute “£360”, and
(b) in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with engine cylinder capacity not exceeding 1,549cc etc), for “£210” substitute “£220”.
(3) In paragraph 1B (graduated rates for light passenger vehicles registered before 1 April 2017), omit paragraph (b) together with the “and” before that paragraph.
(4) In paragraph 1B, for the Table substitute—
CO2 Emissions Figure
(1) | (2) | (3)
Exceeding or, in the first row, equal to or exceeding | Not exceeding | Rate
g/km | g/km | £
0 | 100 | 20
100 | 110 | 20
110 | 120 | 35
120 | 130 | 165
130 | 140 | 195
140 | 150 | 215
150 | 165 | 265
165 | 175 | 315
175 | 185 | 345
185 | 200 | 395
200 | 225 | 430
225 | 255 | 735
255 | — | 760
.
(5) In the sentence immediately following the Table in that paragraph, for the words from “as if” to the end substitute “as if, in column (3), in the last two rows, “430” were substituted for “735” and “760”.”
(6) Omit paragraphs 1C to 1F together with the italic heading before paragraph 1C (which provide for a reduced rate).
(7) In paragraph 1GA (vehicles to which Part 1AA applies), in sub-paragraph (3), omit paragraph (c).
(8) In paragraph 1GC (graduated rates for first licence for light passenger vehicles registered on or after 1 April 2017), in sub-paragraph (2), omit paragraph (b) together with the “and” before that paragraph.
(9) In paragraph 1GC, for Table 1 (vehicles other than higher rate diesel vehicles) substitute—
CO2 Emissions Figure
(1) | (2) | (3)
Exceeding or, in the first row, equal to | Not exceeding | Rate
g/km | g/km | £
0 | 0 | 10
0 | 50 | 110
50 | 75 | 130
75 | 90 | 270
90 | 100 | 350
100 | 110 | 390
110 | 130 | 440
130 | 150 | 540
150 | 170 | 1360
170 | 190 | 2190
190 | 225 | 3300
225 | 255 | 4680
255 | — | 5490
.
(10) In that paragraph, for Table 2 (higher rate diesel vehicles) substitute—
CO2 Emissions Figure | Rate
(1) | (2) | (3)
Exceeding or, in the first row, equal to or exceeding | Not exceeding | Rate
g/km | g/km | £
0 | 50 | 130
50 | 75 | 270
75 | 90 | 350
90 | 100 | 390
100 | 110 | 440
110 | 130 | 540
130 | 150 | 1360
150 | 170 | 2190
170 | 190 | 3300
190 | 225 | 4680
225 | 255 | 5490
255 | — | 5490
.
(11) In paragraph 1GD(1)(rates for any other licence for light passenger vehicles registered on or after 1 April 2017), for the words from “applicable to the vehicle is—” to the end substitute “applicable to the vehicle is £195.”
(12) In paragraph 1GE(2) (rates for light passenger vehicles registered on or after 1 April 2017 with a price exceeding £40,000), for the words from “applicable to the vehicle is—” to the end substitute “applicable to the vehicle is £620.”
(13) In paragraph 1J(a) (rates for light goods vehicles that are not pre-2007, post-2008 lower emission vans or pre-2011 electric vans), for “£335” substitute “£345”.
(14) In paragraph 1N (which defines “pre-electric van” for the purposes of paragraph 1J), for “2003 and” insert “2003 but before 1 January 2007 or on or after 1 January 2009 but”.
(15) In paragraph 2(1) (rates for motorcycles)—
(a) in paragraph (a) (engine cylinder capacity not exceeding 150cc etc), for “£25” substitute “£26”,
(b) in paragraph (b) (motorbicycles with engine cylinder capacity exceeding 150cc but not exceeding 400cc), for “£55” substitute “£57”,
(c) in paragraph (c) (motorbicycles with engine cylinder capacity exceeding 400cc but not exceeding 600cc), for “£84” substitute “£87”, and
(d) in paragraph (d) (other cases), for “£117” substitute “£121”.
(16) In consequence of the amendments made by the preceding provisions of this section, in section 10 of FA 2023, omit subsection (5)(b) and (c).
(17) The amendments made by this section have effect in relation to licences taken out on or after 1 April 2025.
69 Vehicle excise duty for vehicles with exceptional loads etc
(1) In—
(a) paragraph 6(2A)(a) of Schedule 1 to VERA 1994 (vehicles with exceptional loads),
(b) paragraph 9(3) of that Schedule (rigid goods vehicle which has weight exceeding 44,000 kg and is not an island goods vehicle), and
(c) paragraph 11(3) of that Schedule (tractive unit vehicle which has weight exceeding 44,000 kg and is not an island goods vehicle),
for “£1,585” substitute “£1,643”.
(2) The amendments made by this section have effect in relation to licences taken out on or after 1 April 2025.
70 Rate of vehicle excise duty for haulage vehicles other than showman’s vehicles
(1) In paragraph 7(3A) of Schedule 1 to VERA 1994 (which specifies the rate of vehicle excise duty applicable to haulage vehicles other than showman’s vehicles), for “£350” substitute “£365”.
(2) The amendment made by this section has effect in relation to licences taken out on or after 1 April 2025.
(1) VERA 1994 is amended as follows.
(2) In section 62 (other definitions), after subsection (1A) insert—
(1AA) For the purposes of this Act, a vehicle is a “zero-emission vehicle” if the vehicle’s rate of CO₂ emissions measured in grams per kilometre driven, or grams per kilowatt hour, is zero.
(3) In Schedule 1 (annual rates of duty)—
(a) in paragraph 1—
(i) in sub-paragraph (2), after “propelled” insert “, or zero-emission,”;
(ii) in sub-paragraph (2A), after “propelled” insert “, or zero-emission,”;
(b) in paragraph 1A (vehicles to which Part 1A applies), after sub-paragraph (1) insert—
(1A) Sub-paragraph (1B) has effect where—
(a) the vehicle’s rate of CO₂ emissions in grams per kilometre driven is zero,
(b) the certificate mentioned in sub-paragraph (1)(b) does not specify a CO₂ emissions figure, and
(c) this Part of this Schedule would apply to the vehicle if the condition in sub-paragraph (1)(b)(ii) were met.
(1B) For the purposes of this Part of this Schedule—
(a) the certificate is regarded as specifying a CO₂ figure of zero in terms of grams per kilometre driven, and
(b) accordingly the applicable CO₂ emissions figure is to be taken to be zero.
(c) in paragraph 1GA (vehicles to which Part 1AA applies), after sub-paragraph (1A) insert—
(1B) Sub-paragraph (1C) has effect where—
(a) the vehicle’s rate of CO₂ emissions in grams per kilometre driven is zero,
(b) the certificate mentioned in sub-paragraph (1)(b) does not specify a CO₂ emissions figure, and
(c) this Part of this Schedule would apply to the vehicle if the condition in sub-paragraph (1)(b)(ii) were met.
(1C) For the purposes of this Part of this Schedule (and notwithstanding anything in sub-paragraph (5))—
(a) the certificate is regarded as specifying a CO₂ figure of zero in terms of grams per kilometre driven, and
(b) accordingly the applicable CO₂ emissions figure is to be taken to be zero.
(d) in paragraph 1N, in sub-paragraph (b), at the end insert “or a zero-emission vehicle”;
(e) in paragraph 2 (motorcycles)—
(i) in sub-paragraph (1)(a), after “propelled” insert “or a zero-emission vehicle”;
(ii) in sub-paragraph (3), in the definition of “motorcycle”, after “propelled” insert “, or zero-emission,”.
(4) In Schedule 2 (exempt vehicles)—
(a) in the italic heading before paragraph 20G, at the end insert “etc”;
(b) in paragraph 20G (electrically propelled vehicles), after sub-paragraph (1) insert—
(1A) A zero-emission vehicle is an exempt vehicle.
(5) The amendments made by this section have effect in relation to licences taken out on or after 1 April 2025.
(1) Section 30 of FA 1994 (air passenger duty: rates) is amended as follows.
(2) In subsection (2) (short-haul journeys), in paragraph (b), for “£26” substitute “£28”.
(3) In subsection (2A) (long-haul journeys)—
(a) in paragraph (a), for “£88” substitute “£90”, and
(b) in paragraph (b), for “£194” substitute “£216”.
(4) In subsection (4A) (ultra-long haul journeys)—
(a) in paragraph (a), for “£92” substitute “£94”, and
(b) in paragraph (b), for “£202” substitute “£224”.
(5) In subsection (4E) (journeys on aircraft equipped to carry fewer than 19 passengers)—
(a) in paragraph (za), for “£78” substitute “£84”,
(b) in paragraph (a), for “£78” substitute “£84”,
(c) in paragraph (aa), for “£581” substitute “£647”, and
(d) in paragraph (d), for “£607” substitute “£673”.
(6) The amendments made by this section have effect in relation to the carriage of passengers beginning on or after 1 April 2025 but before 1 April 2026.
(1) Section 30 of FA 1994 (air passenger duty: rates), as amended by section 73 above, is amended as follows.
(2) In subsection (1B) (journeys ending in the United Kingdom)—
(a) in paragraph (a), for “£7” substitute “£8”, and
(b) in paragraph (b), for “£14” substitute “£16”.
(3) In subsection (2) (short-haul journeys)—
(a) in paragraph (a), for “£13” substitute “£15”, and
(b) in paragraph (b), for “£28” substitute “£32”.
(4) In subsection (2A) (long-haul journeys)—
(a) in paragraph (a), for “£90” substitute “£102”, and
(b) in paragraph (b), for “£216” substitute “£244”.
(5) In subsection (4A) (ultra-long haul journeys)—
(a) in paragraph (a), for “£94” substitute “£106”, and
(b) in paragraph (b), for “£224” substitute “£253”.
(6) In subsection (4E) (journeys on aircraft equipped to carry fewer than 19 passengers)—
(a) in paragraph (za), for “£84” substitute “£142”,
(b) in paragraph (a), for “£84” substitute “£142”,
(c) in paragraph (aa), for “£647” substitute “£1,097”, and
(d) in paragraph (d), for “£673” substitute “£1,141”.
(7) The amendments made by this section have effect in relation to the carriage of passengers beginning on or after 1 April 2026.
(1) In paragraph 42(1) of Schedule 6 to FA 2000 (climate change levy: amount payable by way of levy), for the table substitute—
TABLE
Taxable commodity supplied | Rate at which levy payable if supply is not a reduced-rate supply
Electricity | £0.00801 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility | £0.00801 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state | £0.02175 per kilogram
Any other taxable commodity | £0.06264 per kilogram
.
(2) The amendment made by this section has effect in relation to supplies treated as taking place on or after 1 April 2026.
(1) Section 42 of FA 1996 (amount of landfill tax) is amended as follows.
(2) In subsection (1)(a) (standard rate), for “£103.70” substitute “£126.15”.
(3) In subsection (2) (reduced rate for certain disposals), in the words after paragraph (b)—
(a) for “£103.70” substitute “£126.15”, and
(b) for “£3.30” substitute “£4.05”.
(4) The amendments made by this section have effect in relation to disposals made (or treated as made) on or after 1 April 2025.
(1) In section 16(4) of FA 2001 (rate of aggregates levy), for “£2.03” substitute “£2.08”.
(2) The amendment made by this section has effect in relation to aggregate subjected to commercial exploitation on or after 1 April 2025.
(1) In section 45(1) of FA 2021 (rate of plastic packaging tax), for “£217.85” substitute “£223.69”.
(2) The amendment made by this section has effect in relation to packaging components produced in, or imported into, the United Kingdom on or after 1 April 2025.
(1) In section 36(1) of FA 2017 (rates of soft drinks industry levy)—
(a) in paragraph (a) (soft drinks that meet higher sugar threshold), for “at the rate of £0.24 per litre” substitute “at the rate of £2.59 per 10 litres”, and
(b) in paragraph (b) (other soft drinks), for “at the rate of £0.18 per litre” substitute “at the rate of £1.94 per 10 litres”.
(2) The amendments made by this section have effect in relation to chargeable events occurring on or after 1 April 2025.