UK Tax Changes Starting April 2025 – Seven Keynotes

(3) Rates of Capital Gains Tax (CGT)

The rate of Capital Gains Tax (CGT) on gains qualifying for Business Asset Disposal Relief (BADR) or Investors’ Relief will increase from 10% to 14% starting 6 April 2025. This rate will further increase to 18% from 6 April next year.  

The main rates of Capital Gains Tax, which apply to assets other than residential property and carried interest, will change from 10% and 20% to 18% and 24% respectively, for disposals made on or after 30 October 2024.

However, the rates of Capital Gains Tax that apply to residential property disposals (18% and 24%) will remain unchanged. Additionally, the annual exemption of £3,000 remains unchanged.

(4) Furnished Holiday Lets (FHL)

Effective from 1 April 2025 for companies and 6 April 2025 for individuals, the FHL tax rules will be abolished. Historically, a property business that qualified as a furnished holiday let enjoyed several tax benefits, including: 

• Deducting interest when calculating the taxable income from the FHL;
• Claiming capital allowances for certain capital expenditures; and
• Potential availability of capital gains tax relief, such as BADR, on the disposal of the property.

(5) Residential Rates of Stamp Duty Land Tax (SDLT)

The temporary residential rates of SDLT introduced by the previous government in 2022 will be withdrawn on 31 March 2025. Effective from 1 April 2025, the following changes will apply:

• The residential nil rate band will revert to £125,000 (from £250,000).
• The first-time buyers’ relief nil rate band will revert to £300,000 (from £425,000).
• The maximum transaction value for first-time buyers’ relief will revert to £500,000 (from £625,000).

(6) Annual Tax on Enveloped Dwellings (ATED)

The ATED is a tax on non-natural persons, such as companies, with interests in UK dwellings valued at more than £500,000. It is calculated and paid annually.

The ATED charges increase automatically each year in line with inflation. For instance, the ATED will rise to £4,450 from £4,400 starting 01 April 2025 for properties valued between £500,000 and £1 million.

Companies within the scope as of 1 April 2025 must submit their return and pay the tax for the year ending 31 March 2026 by 30 April 2025. 

(7) National Minimum Wage Rates

Effective from April 2025, there will be changes to the national minimum wages. The new rates are as follows:

• Ages 21 and over – an increase to £12.21 from £11.44.
• Age between 18 to 20 – a rise to £10.00 from £8.60.

• Age under 18 –increase to £7.55 from £6.40.

• Apprentice – now £7.55, up from £6.40.

Apprentices qualify for the apprentice rate if they are:

• Under 19 years old.
• 19 or older and in the first year of their apprenticeship.