Finance Act 2025
Finance Act 2025 (2025 c. 8)
- Finance Act 2025 (2025 c. 8)
- Part 1 Income tax, capital gains tax and corporate taxes
- Income tax charge, rates etc
- 1 Income tax charge for tax year 2025-26
- 2 Main rates of income tax for tax year 2025-26
- 3 Default and savings rates of income tax for tax year 2025-26
- 4 Freezing starting rate limit for savings for tax year 2025-26
- Income tax provisions relating to cars
- 5 Appropriate percentage for cars: tax year 2028-29
- 6 Appropriate percentage for cars: subsequent tax years
- Capital gains tax rates and reliefs
- 7 Main rates of CGT for gains other than carried interest gains
- 8 Business asset disposal relief: increase in rate
- 9 Investors’ relief: increase in rate
- 10 Investors’ relief: reduction in amount qualifying for relief
- 11 Sections 7 to 10: transitional provision
- 12 Rate of CGT for carried interest gains
- Corporation tax charge and rates
- 13 Charge and main rate for financial year 2026
- 14 Standard small profits rate and fraction for financial year 2026
- Oil and gas
- 15 Increase in rate of energy (oil and gas) profits levy
- 16 Relief from levy for investment expenditure
- 17 Extending the period for which levy has effect
- 18 Decommissioning of carbon storage installations
- International matters
- 19 Pillar Two
- 20 Offshore receipts in respect of intangible property
- 21 Application of PAYE in relation to internationally mobile employees etc.
- 22 Advance pricing agreements: indirect participation in financing cases
- Reliefs for businesses
- 23 Expenditure on zero-emission cars
- 24 Expenditure on plant or machinery for electric vehicle charging point
- 25 Commercial letting of furnished holiday accommodation
- 26 Films and television programmes: increased relief for visual effects
- 27 Certification of films etc: minor amendments
- 28 Films etc: unpaid amounts
- 29 Research and development relief: Northern Ireland companies
- 30 Research and development intensity condition: transitional provision
- Employee-ownership trusts
- 31 Employee-ownership trusts
- Miscellaneous measures
- 32 Overseas transfer charge: pension schemes in EEA state or Gibraltar
- 33 Overseas pension schemes established in EEA states
- 34 Pension scheme administrators required to be resident in United Kingdom
- 35 Alternative finance: diminishing shared ownership refinancing arrangements
- 36 Statutory neonatal care pay
- Part 2 Replacement of special rules relating to domicile
- Chapter 1 New rules for foreign income and gains of individuals becoming UK resident
- 37 Claim for relief on foreign income
- 38 Claim for relief on foreign employment income
- 39 Claim for relief on foreign gains
- Chapter 2 Ending the special treatment of individuals not domiciled in United Kingdom
- 40 Remittance basis not available after tax year 2024-25
- 41 Temporary repatriation facility
- 42 Rebasing of assets
- Chapter 3 Trusts etc
- 43 Trusts: connected amendments, transitional provision etc
- Chapter 4 Inheritance tax
- 44 Excluded property: domicile test replaced with long-term residence test
- 45 Corresponding change for settled property
- 46 Consequential, connected and transitional provision
- Part 3 Other taxes
- Value added tax
- 47 Removal of exemption for private school fees
- 48 Charge on pre-paid private school fees
- 49 Sections 47 and 48: commencement
- Stamp duty land tax
- 50 Increased rates for additional dwellings: transactions before 1 April 2025
- 51 Increased rates for additional dwellings: transactions on or after 1 April 2025
- 52 Contracts substantially performed before relevant rate change
- 53 Purchases by companies etc
- Annual tax on enveloped dwellings
- 54 Alternative finance: land in England, Scotland or Northern Ireland
- 55 Alternative finance: land in Wales
- Stamp duty and stamp duty reserve tax
- 56 Testing of FMI technologies or practices
- Inheritance tax
- 57 Rate bands etc for tax years 2028-29 and 2029-30
- 58 EBTs: prohibition on applying property for benefit of participators etc
- 59 EBTs: restriction on proportion of beneficiaries who may be participators etc
- 60 EBTs: shares entering trust to have been held for two years
- 61 Agricultural property relief: environmental management agreements
- 62 National Savings Bank: statements from HMRC no longer to be required
- Alcohol duty
- 63 Rates of alcohol duty
- 64 Abolition of duty stamps for alcoholic products
- Tobacco products duty
- 65 Rates of tobacco products duty
- Taxes relating to vehicles
- 66 Rates of vehicle excise duty for light passenger or light goods vehicles etc
- 67 Rates of vehicle excise duty for rigid goods vehicles without trailers etc
- 68 Rates of vehicle excise duty for rigid goods vehicles with trailers
- 69 Vehicle excise duty for vehicles with exceptional loads etc
- 70 Rate of vehicle excise duty for haulage vehicles other than showman’s vehicles
- 71 Vehicle excise duty: zero-emission vehicles
- 72 Rates of HGV road user levy
- 73 Rates of air passenger duty until 1 April 2026
- 74 Rates of air passenger duty from 1 April 2026
- Environmental taxes
- 75 Rates of climate change levy
- 76 Rates of landfill tax
- 77 Rate of aggregates levy
- 78 Rate of plastic packaging tax
- Soft drinks industry levy
- 79 Rates of soft drinks industry levy
- Part 4 Miscellaneous and final
- Avoidance
- 80 Limited liability partnerships
- 81 Loans to participators
- Crytpo-asset reporting framework
- 82 OECD crypto-asset reporting framework
- Preparing for new taxes and information sharing
- 83 Duty on vaping products
- 84 Carbon border adjustment mechanism
- Wrong cross-reference etc
- 85 Correction of wrong cross-reference etc
- Final
- 86 Interpretation
- 87 Short title
- Schedules
- Schedule 1 Consequential provision in connection with section 7
- Amendments of TCGA 1992
- Amendments of other Acts
- Schedule 2 Sections 7 to 10 : transitional provision
- Part 1 Transitional provision in consequence of section 7 and Schedule 1
- Introductory
- Allocation of amounts to times before or after 30 October 2024
- Part 2 Anti-forestalling provisions: sections 7(3) and 10(2)
- Introductory
- Assets transferred under unconditional contract made before 30 October 2024
- Investors’ relief: reorganisations of share capital before 30 October 2024
- Interpretation
- Part 3 Anti-forestalling provisions: sections 8(3) and (6) and 9(4) and (8)
- Introductory
- Assets transferred on or after 6 April 2025 under unconditional contract made before 30 October 2024
- Assets transferred on or after 6 April 2025 under unconditional contract made on or after 30 October 2024 but before 6 April 2025
- Assets transferred on or after 6 April 2026 under unconditional contract made in tax year 2025-26
- Paragraphs 11 to 13: supplementary provision
- Business asset disposal relief: reorganisations of share capital before 30 October 2024
- Business asset disposal relief: reorganisations of share capital on or after 30 October 2024 but before 6 April 2026
- Business asset disposal relief: exchanges of securities etc before 30 October 2024
- Business asset disposal relief: exchanges of securities etc on or after 30 October 2024 but before 6 April 2026
- Investors’ relief: reorganisations of share capital before 30 October 2024
- Investors’ relief: reorganisations of share capital on or after 30 October 2024 but before 6 April 2026
- Interpretation
- Schedule 3 Payments into decommissioning funds
- Payments into decommissioning fund treated as general decommissioning expenditure
- Meaning of “relevant transferred plant or machinery”
- Application of sections 164 and 165 of CAA 2001
- Prevention of subsequent allowance where expenditure paid out of qualifying payment
- Application of the Energy (Oil and Gas) Profits Levy Act 2022
- Commencement
- Schedule 4 Pillar two
- Part 1 Introduction
- Part 2 Undertaxed profits rule
- Multinational top-up tax to include undertaxed profits rule
- Expansion of chargeable persons
- Charge to multinational top-up tax to include UTPR
- New chapter to deal with UTPR
- Transition into regime
- Consequential amendments: IIR and qualifying undertaxed profits tax
- Other consequential amendments etc
- Commencement
- Part 3 Others
- Permanent establishments as excluded entities
- Use of substituted values
- Flow-through entities
- Tax equity partnerships
- Blended CFC regimes
- No allocation of deferred tax assets and liabilities under blended CFC regimes
- Cross-border allocation of current tax under cross-crediting regimes
- Cross-border allocation of deferred tax
- Extension of qualifying foreign tax credits
- Deferred tax recapture
- Existing deferred tax assets and liabilities arising under blended CFC regimes
- Substance based income exclusion: permanent establishments and flow-through entities
- Eligible payroll costs
- Additional top-up amounts
- Joint ventures
- Domestic top-up tax
- Domestic top-up tax: excluded entities
- De minimis rule
- Transitional safe harbour
- Transitional safe harbour: arbitrage arrangements
- Substance based income exclusion: removal of provision for election
- Inclusion ratio
- Specification of territories and taxes
- Filing etc not required before 30 June 2026
- Minor amendments
- Commencement
- Schedule 5 Furnished holiday lettings
- Part 1 Amendments relating to income tax
- FA 2004
- ITTOIA 2005
- ITA 2007
- Consequential repeals of amending provisions
- Part 2 Amendments relating to corporation tax
- CTA 2009
- CTA 2010
- Consequential repeals of amending provisions
- Part 3 Amendments relating to capital allowances
- CAA 2001
- Consequential repeals of amending provisions
- Part 4 Amendments relating to chargeable gains
- TCGA 1992
- Consequential repeals of amending provisions
- Part 5 Commencement and transitional provision
- Commencement: Parts 1 to 3
- Commencement: Part 4
- Anti-forestalling: disposals under unconditional contracts
- Corporation tax: accounting periods straddling 1 April 2025
- Carry-forward of losses: income tax
- Carry-forward of losses: corporation tax
- Plant and machinery allowances
- Business asset disposal relief: disposals relating to pre-commencement businesses
- Post-commencement disposals by companies with substantial shareholding
- Schedule 6 Employee-ownership trusts
- Part 1 Capital gains tax
- Introduction
- Requirement for trustees of employee-ownership trusts to be UK resident
- Trustee independence
- Temporary breach of trustee independence requirement or residence requirement arising from death of trustee
- Consideration requirement
- Extended period for disqualifying events
- Additional information to be provided in claims
- Part 2 Income tax
- Participation requirement not infringed by exclusion of directors
- Relief for distributions to trustees of employee-ownership trusts
- Schedule 7 Diminishing shared ownership refinancing arrangements
- Income tax
- Corporation tax
- Capital gains tax
- Application
- Schedule 8 Relief on foreign employment income: consequential and transitional provision
- Part 1 General consequential amendments
- Part 2 Consequential amendments relating to PAYE
- Part 3 Transitional provision
- Individuals no longer meeting section 26A requirement not qualifying new residents
- Certain individuals meeting section 26A requirement treated as qualifying new residents
- Limit on relief not to apply to certain foreign employment relief claims
- Definitions
- Schedule 9 Income tax and capital gains tax: remittance basis and domicile
- Part 1 Remittance basis
- No remittance basis for tax years after 2024-25
- Amendments of TCGA 1992 connected with end of remittance basis
- Amendments of ITEPA 2003 connected with end of remittance basis
- Amendment of ITTOIA 2005 connected with end of remittance basis
- When amounts will be remitted
- Relief for amounts remitted again on becoming UK resident
- Part 2 Removal of domicile (primary legislation)
- Removal of exemption for persons not domiciled in United Kingdom
- Transferable tax allowance for married couples etc
- Residence of personal representatives: domicile of deceased no longer relevant
- Residence of trustees: domicile of settlor no longer relevant
- Application of Income Tax Acts in relation to deemed employment
- Pension schemes
- Domicile of overseas electors
- Situs of debt
- Trust reporting requirements
- Trusts with vulnerable beneficiary
- Disposals of deeply discounted securities
- The accrued income scheme
- FOTRA securities
- Reliefs in respect of income from investments etc. of certain pension schemes
- Part 3 Removal of domicile (secondary legislation)
- Education funding
- Making Tax Digital
- Schedule 10 Temporary repatriation facility
- Part 1 Temporary repatriation facility charge
- Introduction and charge
- Qualifying overseas capital: main cases
- Capital payments made by settlement: section 87 and 89 TCGA 1992 cases
- Capital payments made by settlement: offshore income gains cases
- Capital payments made by settlement: Schedule 4C cases
- Amounts of income treated as qualifying overseas capital
- Deemed income under section 732 of ITA 2007 where pre-2025 gains available for matching
- Designation of qualifying overseas capital
- Payment of the TRF charge through the income tax system
- Part 2 Exemptions etc for designated qualifying overseas capital
- Income tax exemptions and relief
- Income tax exemptions: application of transfer of assets abroad rules in future years
- Capital gains tax: main exemption
- Capital gains tax: reliefs in respect of matched capital payments
- Amounts derived from designated qualifying overseas capital
- Effect of this Schedule on section 65(5) IHTA 1984 and section 260(2) of TCGA 1992
- Part 3 Effect of designation on when amounts remitted etc
- Temporary disapplication of nominated income ordering rules
- Mixed funds: section 809Q of ITA 2007
- Mixed funds: section 809R of ITA 2007
- Mixed funds: TRF capital account
- Temporary application of annualised basis to mixed funds containing TRF capital
- Business investment relief
- No tax credits for pre 2016-17 dividends etc
- Commencement
- Schedule 11 Rebasing of assets
- Rebasing of assets for individuals who have been subject to the remittance basis
- Assets becoming situated in the United Kingdom before 6 April 2025
- Election for paragraph 1 not to apply
- Rebasing under Schedule 8 to F(No.2)A 2017
- Schedule 12 Trusts: connected amendments, transitional provision etc
- Part 1 Settlements (income)
- Part 2 Transfer of assets abroad
- Part 3 Settlements (chargeable gains)
- Part 4 Commencement and transitional provision
- Commencement
- Settlements: transitional protection where available protected income is increased by this Schedule
- Onward gifts: settlements (income)
- Onward gifts: transfer of assets abroad
- Onward gifts: settlements (chargeable gains)
- Schedule 13 Inheritance tax
- Part 1 Amendments to IHTA 1984 and related legislation
- IHTA 1984
- FA 1986
- FA 2004
- Constitutional Reform and Governance Act 2010
- Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004 (S.I. 2004/2543)
- Inheritance Tax (Delivery of Accounts) (Excepted Settlements) Regulations 2008 (S.I. 2008/606)
- Part 2 Commencement and transitional provision
- Commencement
- Certain pre-commencement emigrants treated as not being long-term UK residents
- Property moving between settlements
- Settlor’s death etc: application to bodies corporate
- Deemed domicile rules still to apply in relation to times before commencement
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