Chancellor Healey Rejects Capital Gains Tax Increase Ahead of Budget

Chancellor John Healey has rejected calls from some Labour MPs to increase the Capital Gains Tax (CGT) before next week's Budget. While ministers Wes Streeting and Louise Haigh had supported raising CGT earlier, Healey is minded to keep the current rates. CGT applies to profits made from selling assets like shares or non-primary residence properties. Currently, CGT rates are 18% for basic rate taxpayers and 24% for higher rate taxpayers.

HMRC estimated that raising the higher CGT rate by 10% could reduce government receipts by £3.6 billion in 2028-29. Healey emphasized the importance of supporting business profits and investment in his recent speech. Some Labour figures pressured for aligning CGT with income tax, which is generally higher, but Healey ruled out this equalization. Additionally, senior banking executives expect Healey to increase taxes on banks due to their recent high profits.

The decision not to raise CGT comes amid warnings that higher CGT might cause wealthy individuals to leave the country or delay asset sales. Meanwhile, opposition Tory leader Kemi Badenoch plans to urge government spending cuts and borrowing reductions in her pre-Budget speech. The Chancellor’s stance on CGT impacts tax policy direction and government revenue from asset sales, shaping investment and wealth management decisions for ordinary investors.