Chancellor John Healey Rejects Capital Gains Tax Increase Ahead of Budget

Chancellor John Healey has dismissed calls from some Labour MPs to increase Capital Gains Tax, according to sources reporting ahead of next week’s Budget. The decision to reject raising the tax on profits from asset sales, such as shares or secondary properties, comes amid warnings that higher rates could drive wealthy individuals out of Britain or lead them to defer selling assets.

Capital Gains Tax is currently charged at 18% for basic-rate income taxpayers, while higher and additional-rate payers face a 24% rate. According to the BBC, HMRC estimated last year that lifting the higher rate of CGT by 10% could reduce Treasury receipts by £3.6bn in the 2028-9 financial year.

Decisions on Capital Gains Tax and Wealth Creation

Influential Labour figures had previously pushed for equalising Capital Gains Tax and income tax. Cabinet ministers Wes Streeting and Louise Haigh had both voiced support for raising CGT before Andy Burnham became prime minister in July. Furthermore, Streeting called for a wealth tax that works in May, while Haigh suggested capital gains should align more closely with income tax rates.

Despite these internal pressures, Chancellor Healey indicated his economic priorities in a speech last month. “I want to see this country as a country of wealth creation. I want our government decisions and policies to raise the levels of confidence, and investment, and profit in British business,” Healey stated. Lord Jim O’Neill, a former adviser and Goldman Sachs Chief Economist, also warned Prime Minister Andy Burnham against lifting the tax, stating it would send the wrong message to the business community.

Wider Budget Expectations and Political Reactions

While the chancellor has ruled out levelling income tax and Capital Gains Tax rates, senior banking executives have told the BBC they anticipate higher taxes on the banking sector due to bumper profits reported by UK lenders.

In response to upcoming fiscal plans, Conservative Party leader Kemi Badenoch is expected to urge the government to drop its spending plans and reduce borrowing during a pre-Budget speech. Badenoch will advise the prime minister and the chancellor to live within their means, highlighting Conservative proposals to save £70bn through spending cuts across welfare and overseas development aid.

Source: Chancellor rejects calls to raise Capital Gains Tax in Budget (source-feed timestamp 2026-10-20T06:50:52+00:00). AI-assisted report based on the cited linked article and its RSS feed; details were not independently verified.