Bulletins | June 14, 2024



This week, we have had the publication by the Conservative and Labour parties of their manifestos ahead of the general election on 4 July 2024. In this month’s Private Client Legal Update, we summarise what these manifestos include on the parties’ tax policies should they come into power. For a summary table comparing the two parties’ tax pledges, please click here.

The Conservative Party Manifesto

On 11 June 2024, the Conservative Party published their manifesto. The following are their key pledges on tax policies affecting private clients.

  • Capital gains tax (“CGT“) – a commitment not to raise CGT rates; to retain Business Asset Disposal Relief for gains on qualifying shares and business assets; to retain Principal Private Residence Relief (“PPR relief”) so that an individual’s main home is exempt from CGT; and the introduction of a two-year temporary CGT relief for landlords who sell their property to existing tenants.
  • Inheritance tax (“IHT“) – there was no mention of any planned abolition of IHT despite rumours in the lead-up to the publication date; however, there was a pledge that the existing IHT reliefs for qualifying agricultural and business property (Agricultural Relief (“AR“) and Business Relief (“BR“) respectively) will be retained.
  • Income tax – there was a commitment not to raise income tax rates; but no mention of whether the personal allowance (frozen at £12,570 since 2021/22) would be raised or whether the tax bands would be altered, both of which can provide a government with ways to increase their tax take from income tax without raising rates.
  • National insurance – a further cut to the main rate of employee national insurance to 6% by April 2027 (currently 8%) and an aim to abolish the main rate of self-employed NICs entirely by the end of the Parliament. The party also stated a long-term ambition to abolish national insurance completely “when financial conditions allow”.
  • Property taxes – a commitment not to increase the number of council tax bands, undertake an expensive council tax revaluation or cut council tax discounts; and a commitment not to increase the rate or level of Stamp Duty Land Tax (“SDLT“).
  • Pensions – there will be no new taxes on pensions; there will be a new “Triple Lock Plus”, guaranteeing that both the state pension and the tax-free allowance for pensioners will always rise with the highest of inflation, earnings or 2.5%; the personal allowance for pensioners will be increased by introducing a new age-related personal allowance from April 2025; the 25% tax free lump sum and tax relief on pension contributions at marginal rates will both be retained; and a commitment not to extend national insurance to employer pension contributions.

Tax cuts

The overall theme of the manifesto in respect of tax policy was “tax cuts” which was as expected following campaigning on the election circuit so far. As noted above, however, whilst there was a commitment not to raise the rates of certain taxes as the electorate know from the austerity measures introduced following the Covid pandemic, the overall tax burden is currently high mainly as a result of the Conservative government freezing tax allowances and using “fiscal drag” to increase revenue from tax without increasing headline rates. There were no pledges to discontinue such freezes.


In addition, there were no pledges in respect of the changes to the taxation of non-UK domiciled individuals (“nondoms“) already announced in the Spring Budget 2024 to take effect from 6 April 2025. For further details and analysis on these changes, please see our website content here. Whilst this is not completely unexpected given that details of the proposed changes have already been published; the lack of a pledge on the topic does mean that the Conservatives retain flexibility to change what they have already announced. Many within the private client industry have been lobbying the government as part of the government’s listening events in response to the Spring Budget announcement, to make concessions to their proposals particularly in relation to the proposed period during which non-doms will be able to benefit from an exemption form UK tax on their foreign income and gains – currently proposed as four years (a significant decrease compared to the current non-dom regime).

The Labour Party Manifesto

The Labour Party launched their manifesto on 13 June 2024. The following are their key pledges on tax policies affecting private clients.

  • Non-doms – a commitment to abolish non-dom status and replace it with a modern scheme for non-doms in the UK for a short period; and a pledge to end the use of offshore trusts to avoid inheritance tax.
  • CGT – a commitment to close the carried interest CGT “loophole” so that performance-related pay within the private equity industry is no longer treated as capital gains; this would allow the tax rate on carried interest to effectively be raised from 28% to 45%.
  • IHT – no pledges.
  • Income tax – a commitment not to increase the basic, higher, or additional rates.
  • National insurance – a commitment not to increase.
  • Taxes on property – a commitment to increasing the rate of the SDLT surcharge paid by non-UK residents by 1%; no pledges on council tax.
  • Tax on private schools – a commitment to end the VAT exemption and business rates relief for private schools.


As expected, the manifesto includes a pledge to abolish non-dom status. The full details of Labour’s non-dom regime are not clear but their manifesto pledge to replace the non-dom regime with “a modern scheme for people genuinely in the country for a short period” suggests that Labour may be receptive to calls to increase the exemption period beyond the four-year period proposed by the Conservative government. 

The manifesto also includes a promise to “end the use of offshore trusts to avoid inheritance tax”. Whilst we need to await details, this is most likely to refer to the ability for the offshore “excluded property” trusts of UK resident non-doms to remain outside the scope of UK IHT provided they are set up before 6 April 2025 – something that Labour have previously identified as a “loophole” in the Conservatives’ plans.

In their fiscal plan within the manifesto, Labour refer to generating revenue from “closing further non-dom tax loopholes“, including (in a footnote) “the non-dom discount loophole in 2025/26“. It is our understanding that they are referring to removing the ability for those currently claiming the remittance basis of taxation to remit offshore income and gains at a discount during the 2025/26 tax year. This is a concession which forms part of the series of transitional provisions proposed by the Conservatives as part of the non-dom reforms, and intended to ease the transition for those remaining in the UK to be taxed on an arising basis in the future.

For many non-doms, Labour’s manifesto pledges on non-doms will only serve to confirm their direction of travel and, if Labour are successful on 4 July, we suspect that many will seek professional advice on relocation planning and will accelerate plans to leave the UK, in addition to those who are already making such plans.


The manifesto’s silence on increasing rates of CGT coupled with Sir Keir Starmer’s refusal in the Leaders’ Debate on 12 June, a day before their manifesto was published, to rule out such rises, could be interpreted as meaning that an increase in CGT could be on the cards under Labour. Those with sizeable investment gains may wish to consider realising profits now before a potential Budget in the autumn, and paying some CGT at the current favourable rates and/ or taking advantage of CGT reliefs that may be curtailed under a Labour government.


Equally significant is the manifesto’s silence on IHT which means that changes cannot be ruled out under Labour. Whilst a rise in IHT rates is unlikely, IHT reliefs such as AR and BR could be curtailed, particularly in light of Labour’s manifesto pledge for “renewed focus on tax avoidance by the wealthy“; although to do so, particularly in the context of BR, could be at the detriment of their pledge to “kickstart economic growth“. 

Tax on school fees

A concern for some clients is, of course, the proposed imposition of VAT on private school fees. Although there are options around trusts and investment products to help families save for fees, a rise in school fees will undeniably have an impact, and could, along with other factors, encourage wealthy internationally mobile UK families to follow non-doms and emigrate in search of more affordable schooling for their children. Many schools now have overseas branches or there are top-rate international schools that, coupled with more favourable domestic tax regimes – such as in Dubai – could be attractive alternatives.

To discuss how the tax proposals above may affect you and potential planning options ahead of the general election based on your particular circumstances, please contact your usual Wedlake Bell adviser.