Election 2024: Possible tax changes ahead?

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, it is subject to change and we are not responsible for any errors or omissions.

With the 2024 general election campaign in full swing, many expats are asking how the outcome of the poll (scheduled on 4 July) might affect them. In particular, are tax changes on the horizon? What could a change in government potentially mean for Brits living abroad?

Below, we examine some of the main tax pledges announced so far and consider their implications for British citizens when the “electoral dust” settles.

We hope these insights are useful. If you want to discuss your financial plan with a member of our team, please get in touch to arrange a no-obligation financial consultation at our expense:

+34 966 460 407

Tax pledges: what we know so far

Naturally, the UK’s major parties are not primarily concerned with the needs of expats. Their voting bases are mainly based at home. So, their manifestos and tax pledges will be aimed at these audiences. Any implications for expats, therefore, will likely be arrived at indirectly.

What have the major parties said so far? The Conservatives’ headline tax pledge for 4 July is a promise of further cuts to National Insurance (NI) if they win (2% lower by April 2027). No cuts to income tax, capital gains tax (CGT) or other major taxes have been announced.

The Labour Party has pledged no further rises to income tax, VAT or NI. However, they have announced three important tax changes, some of which could bear upon expats. These include:

  • Bringing in a windfall tax on the supernormal profits of energy companies.
  • Scrapping the VAT exemption on private schools in the UK.
  • Ending the non domicile (non-dom) status.

Interestingly, analysts have pointed out that Labour has kept quiet about capital gains tax (CGT) and council tax. This potentially leaves the door open for tax rises if they win the election.

Other parties have also announced some interesting tax policies. Reform has pledged to raise the tax-free Personal Allowance and abolish inheritance tax (IHT) for estates worth under £2m. The Liberal Democrats want to overhaul the CGT system and a tax on share buybacks.

No meaningful tax cuts?

The eagle-eyed among you may have noticed that no major party is promising any significant tax cuts. Indeed, both Labour and the Conservatives appear committed to maintaining the current “freeze” of income tax bands until April 2028. The latter has only managed to promise a NI cut of 2% in three years’ time.

The reason for this appears to lie in the UK’s economic landscape, facing all political parties. According to the IFS (Institute for Fiscal Studies), whoever forms the government in July will face some of the “toughest choices in generations” on tax and spending.

Indeed, many analysts agree that most parties are not being honest about the tough economic trade-offs coming over the next parliament. Low growth is expected. A high national debt (98% of GDP) and high interest payments will make it difficult to balance the books without raising taxes (which would likely constrain growth further).

What does this all mean for expats?

Unless you are a “non-dom”, there is little in most parties’ manifestos to bring immediate excitement or alarm. One conceivable area of tax change for expats could lie in a new UK government renegotiating various international agreements (e.g. rejoining the EU or scrapping various “double taxation” treaties with other countries).

However, no major policies have been identified on these fronts yet for Labour (the party predicted most likely to win in July) or the Conservatives.

One concern we have noticed is a fear – amongst certain people – that Labour may put their pensions “at risk” if they win the election. However, it is important to retain a sense of balance and perspective on this topic.

Pensions could conceivably change in two ways under a Labour government:

  • Reintroduction of the “lifetime allowance” (in some form).
  • Scrapping the tax “loophole” which lets pension funds be bequeathed tax-free if you die before age 75.

Given the above-mentioned economic challenges likely to occur in 2024-25, it will be tempting for a new government to consider these areas as possible ways to raise tax revenues. Regardless of which party wins, the State Pension age is likely to keep rising. Current plans are to increase it to 67 by 2028 and 68 by 2046. However, it is possible that these schedules could be accelerated.

However, these are all hypothetical scenarios. You cannot build a financial plan based on what “could happen”. Rather, it is more prudent to build a flexible plan which helps you adapt to the shifting tax landscape (e.g. by diversifying your assets across different tax-efficient “vehicles”).

Here at Scottsdale, we are available to discuss these matters in more detail and hear your concerns about pensions, taxes and more.


If you are interested in discussing your own financial plan or tax strategy with us, please get in touch to arrange a no-commitment financial consultation at our expense:

+34 966 460 407

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