Chancellor John Healey has decided against raising Capital Gains Tax in the upcoming Budget, despite pressure from some Labour MPs, citing fears of driving wealthy investors abroad and reducing Treasury receipts.
01Summary
- 01Chancellor John Healey has dismissed calls from Labour MPs Wes Streeting and Louise Haigh to increase Capital Gains Tax (CGT).
- 02CGT is currently charged at 18% for basic-rate income taxpayers and 24% for higher-rate taxpayers.
- 03HMRC estimated that raising the higher rate of CGT by 10% would reduce Treasury receipts by £3.6bn by 2028-29.
- 04Former Goldman Sachs chief economist Lord Jim O'Neill warned the move would send 'the wrong message to business'.
- 05Healey has already ruled out equalising CGT and income tax rates, according to the Financial Times.
02Why it matters
This decision affects investors and business owners in the UK, as keeping CGT rates low aims to prevent wealthy individuals and entrepreneurs from leaving the country, which could bolster economic growth and tax revenues.
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