Chancellor John Healey does not intend to raise capital gains tax in the forthcoming Budget, according to the BBC and The Guardian. The reports cite concerns that wealthier taxpayers could leave the UK or delay selling assets. These are reports about plans ahead of the Budget, not an officially announced tax decision.
The BBC reported on 20 October that the Chancellor does not intend to increase capital gains tax (CGT), despite calls from some Labour politicians. Some Cabinet members were also reported to have previously supported higher taxation of capital gains.
The Guardian describes similar plans, citing reporting by The Times and confirmations obtained by journalists through government sources. Both publications draw on the original Times reporting, however, so they should not be treated as two wholly independent confirmations.
Questions over how much a rise would raise
According to both outlets, taxpayers’ possible reactions were an important argument against increasing CGT. The warnings were that some wealthy people could leave the UK, while others might hold off selling their assets. In that scenario, a rise could reduce tax receipts rather than increase them. That remains a reported forecast, not an established consequence of a tax change.
CGT applies to the profit made from selling assets that have increased in value. The BBC gives shares and properties that are not the owner’s main home as examples. For anyone considering such transactions, the key distinction is between media reports about possible policy and the rules currently in force: reporting about the Chancellor’s plans does not itself change the law.
The BBC and Guardian reports do not amount to an official Treasury statement. The publication of the Budget will establish which measures the government actually puts forward.
