Chancellor rejects calls to raise Capital Gains Tax in Budget
Influential Labour figures had been pushing for equalising CGT and income tax, but critics have said this could drive wealthy people out of Britain.
Chancellor John Healey has rejected calls from Labour MPs to raise Capital Gains Tax (CGT) in his upcoming Budget. Both Cabinet ministers, Wes Streeting and Louise Haigh, had previously backed the idea of increasing CGT prior to Andy Burnham's ascension as prime minister in July. Healey's decision comes after warnings that raising CGT could result in financial loss for the government if wealthy individuals opt to leave the country or postpone selling off their assets, according to the Times.
Healey has previously expressed his desire to position the UK as a country of wealth creation, emphasizing that government policies should foster confidence, investment, and profit. Lord Jim O'Neill, former adviser to Burnham and Goldman Sachs Chief Economist, cautioned that raising CGT would send the wrong message to businesses.
However, influential Labour figures had advocated for aligning CGT with income tax, which typically carries a lower tax rate. Despite Haigh's suggestion to increase capital gains to align them with income tax before becoming Burnham's first secretary of state, Healey has ruled out equalizing the two tax rates, as reported by the Financial Times.
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