British Abroad

Background

The Chancellor’s Autumn UK Budget 2024 was announced under pressure. A new government attempting to slow the decline of trust among citizens, businesses and investors in the UK’s sluggish economy, and with added constraints from inflation, NHS spending, and rising public sector costs, the Labour government is trying to balance the books without raising core taxes on workers.

Here’s a breakdown of the most important changes — especially those that may affect Brits abroad.

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AT A GLANCE: UK Budget 2024 Changes

Economic Forecast

• The economy is expected to grow slowly:
  • 2.0% in 2025
  • 1.8% in 2026
• Inflation is expected to average:
  • 2.6% in 2025
  • Then gradually fall back to the 2% target
• The budget deficit is forecast to be £55.5 billion in 2024–25

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State Pension – Went Up in April 2025

• The full rate of the new State Pension is now £230.25 per week
• The basic and new State Pension both rose by 4.1%.
• This helps keep pace with inflation, and although it’s still below recent increases, the Labour Government announced their committment to the Triple Lock for a full five years.

For expats claiming the UK State Pension abroad, this increase will apply if you live in a country with a social security agreement with the UK — so your pension may be frozen when you claim it, unless you meet certain criteria or get professional advice on your residency options.

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Income Tax and National Insurance (NI)

• Class 2 Voluntary National Insurance Contributions now at least £182 / missing year
• Class 3 Voluntary National Insurance Contributions now at most £923 / missing year
• No changes to basic, higher, or additional income tax rates.
• No change to VAT or NIC rates for UK employees.
• Personal tax thresholds (like the personal allowance) will remain frozen until April 2028, then rise with inflation.

Key change for employers:

• Employer NI will rise from 13.8% to 15%.
• However, the Employment Allowance increases from £5,000 to £10,500, and is now open to more small businesses (no £100,000 cap).
• This could benefit small UK-registered businesses run by British expats.

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Capital Gains Tax (CGT) and Inheritance Tax (IHT)

• CGT rates rise from:
  • 10% to 18% (basic rate)
  • 20% to 24% (higher rate)
• Inheritance Tax changes:
  • Unused pension pots will now be included in your estate from April 2027.
  • Agricultural and business property relief will be reformed:
    • First £1 million gets 100% relief
    • Anything above that gets 50% relief
  • The nil-rate band (£325,000) and residence nil-rate band (£175,000) are frozen until April 2030

These changes will affect expats with UK assets or pensions being passed to children or spouses.

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Pensions – Big Changes for Brits Abroad

• From 30 October 2024, the Overseas Transfer Charge will apply to all pension transfers to the EEA and Gibraltar.
  • This closes a long-standing tax loophole.
  • Many expats transferring UK pensions to QROPS (Qualifying Recognised Overseas Pension Schemes) will now face a 25% charge unless specific exemptions apply.
• From April 2026, only UK-resident pension scheme administrators will be allowed. This could impact schemes run from abroad or through international providers.
• From April 2025, a new residence-based system for IHT begins.
  • Offshore trusts will no longer be able to shield assets from UK IHT.

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Changes for Non-Doms

• The non-dom tax regime is being scrapped from 6 April 2025.
  • It will be replaced with a simpler residence-based system.
  • New arrivals to the UK will pay no UK tax on foreign income and gains for their first four years of residency — but only if they opt into the regime.

This affects Brits returning from long-term overseas stays who have been using non-dom status.

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Property – Stamp Duty Rises for Second Homes

• From 31 October 2024, the Stamp Duty Land Tax (SDLT) surcharge on second homes and buy-to-let properties rises from 3% to 5%.
• Applies to second homes, investment properties, and company purchases.

This is a key point for expats with rental property portfolios in the UK or planning to invest from abroad.

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Private Schools, Alcohol and Department Spending

• VAT will be added to private school fees in England.
• Alcohol duty sees a slight cut – a penny off a pint.
• The Department of Health and Social Care gets an extra £22.6 billion in 2025–26.
• 6,500 new teachers will be recruited in England.

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Offshore Tax Compliance

• The government is investing more in tackling offshore tax avoidance, particularly targeting wealthy individuals and complex corporate structures.
• If you have offshore holdings, trusts, or accounts, expect more scrutiny.

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Summary – Key Takeaways for British Expats

• State Pensions are going up – but still frozen in countries like Thailand unless a treaty exists.
• Overseas pension transfers will be taxed – even to the EU – from October 2024.
• Inheritance Tax planning is getting tighter, especially for pensions and trusts.
• Buy-to-let in the UK is becoming more expensive for expats.
• Non-dom status ends – a big shift for returning Brits or those with mixed tax residency.

We’ll be monitoring how these changes affect you. If you’re a British expat with family or homes in the UK, or you have pensions there and don’t plan to return, it may be time to get set-up through expert advice.

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