How Does the Autumn Budget 2024 Impact on Divorce Proceedings?

The two main areas relevant to divorce law are the increases in capital gains tax (CGT) and the changes in which Carried Interest is taxed, which affects my clients in private equity.

CGT has increased with immediate effect from 10% to 18% for non and basic rate taxpayers and from 20% to 24% for higher and additional rate taxpayers. Entrepreneurs’ relief has increased to 14% for tax year 2025/6 and 18% for tax year 2026/7.

The change to the taxation of Carried Interest moves from a capital gains tax regime to income tax.

The other impact will be in relation to the increased school fees burden for those who have Court Orders ordering them to pay school fees. I expect we may see variation applications rise as the increase of 20%, with the introduction of VAT may be unaffordable for many.

There are also changes to inheritance tax and stamp duty land tax which although less relevant to divorce cases, constitute significant change.

I work with tax professionals who provide invaluable assistance in complex divorces and divorces where one or both parties are non-dom for tax purposes, which will also change with the recent Budget.