Chancellor Healey Rules Out Capital Gains Tax Hike Ahead of Budget

UPDATE - follow-up to Chancellor rejects calls to raise Capital Gains Tax in Budget: Chancellor John Healey has decided against raising Capital Gains Tax in the upcoming Budget to prevent an investor exodus from the UK.

Reactions and Warnings

Cabinet ministers Wes Streeting and Louise Haigh had previously supported raising the tax before Andy Burnham became prime minister in July. Critics warned that a tax increase could cost the government money if wealthy individuals moved abroad or delayed selling assets. HMRC figures from last year estimated that raising the higher rate by 10% would reduce Treasury receipts by £3.6bn in 2028-9. Prime Minister Andy Burnham faced similar warnings from his former adviser Lord Jim O'Neill, who said higher rates would send the wrong message to business. Meanwhile, Communities Secretary Angela Rayner declined to speculate on the Budget during a television appearance.

Context

Capital Gains Tax is levied on profits made from selling assets like shares or secondary properties, with different rates applied based on a taxpayer's income tax bracket. The government faces tight fiscal constraints due to manifesto pledges ruling out increases to income tax, National Insurance, and VAT.