Shoosmiths experts comment on the Spring Budget 2024

Following chancellor Jeremy Hunt’s Spring Budget speech made on 6 March 2024, legal experts at law firm Shoosmiths share their views on the announcements.

Kate Garcia, a tax partner in Shoosmiths’ corporate team with a focus on real estate transactions and property taxes, commented on the upcoming MDR and CGT tax changes: “It is not entirely surprising to see the government abolish multiple dwellings relief from stamp duty land tax (MDR) given the number of unreasonable claims for MDR which HMRC have had to contend with. What is surprising, however, is that the government has sought to justify the abolition on the basis of an economic evaluation - which clearly states the findings should not be considered conclusive evidence of MDR failing to reach its objectives of reducing barriers for purchasing residential property with a view to supporting supply in the private rented sector.

“The reduction in the rate of capital gains tax (CGT) applicable to residential property gains will be welcome news to those looking to dispose of second homes or other properties which do not benefit from principal private residence relief, although with the rate still at 24% it is unlikely to draw many new sellers to market.” 

Nicky Jenkins, a legal director in Shoosmiths’ IP, commented on the additional £45 million pledge to fund medical research: “Medical charities have long been significant funders of important R&D into medical conditions and treatments. 

“While £45m investment might not seem on the face of it like a substantial amount given the huge costs involved in developing and bringing a new drug, treatment or medical device to market, we note that that this amount is in addition to the £520m announced in the Autumn statement of last year so the total amount may go a long way to fund research into debilitating conditions like cancer and dementia. We look forward to learning how the funds will be distributed.”

Jonathan Smart, head of Shoosmiths’ automotive sector, commented on the government’s pledge to invest millions to support mobility innovation: "This infusion of £270 million to advanced manufacturing industries including automotive innovation aligns with the global need to further support the advancement of innovative and sustainable mobility solutions. I am optimistic about the opportunities this investment presents for the growth of innovative technologies, particularly for automotive. Automotive remains one of our core focus areas and Shoosmiths looks forward to engaging with its many automotive clients and contacts to support this rapid evolution of automotive technology."

Commenting on the announcement to investment in the Green Industries Growth Accelerator, James Wood-Robertson, head of Shoosmiths’ Energy and Infrastructure sector said: “While the further £120m injection into the Green Industries Growth Accelerator featured prominently in the ‘energy’ headlines of this Spring Budget – no doubt, a further boost for businesses (particularly new technologies) in the supply chains for offshore wind, networks, CCUS, hydrogen and nuclear – the final budget notice for Contract for Difference Allocation Round 6 (AR6) flew under the radar.  Presumably, it was judged to have less political collateral than the additional GIGA funding but, by any measure, it was a significant announcement.  

“The government committed a budget of over £1bn for AR6; the largest budget to be set for an allocation round.  As usual, the budget will be split within a number of pots: Pot 1 – £120m for established technologies (e.g. onshore wind and solar); Pot 2 – £105m for emerging technologies (within which a minimum of £8m will be ear-marked for geothermal); and Pot 3 – a whopping £800m for offshore wind.  

“So, despite not hitting the Budget headlines, through its actions at least the government seems to be doubling down on its main means of supporting the delivery of clean energy project development – Contracts for Difference.”