Overview
- Former Labour leader Lord Neil Kinnock publicly urged Prime Minister Andy Burnham in early August to align capital gains tax rates with income tax, saying the change could raise about £12bn a year.
- A BMG poll for The i Paper found that 66% of adult Britons support a targeted wealth tax on fortunes above £10m, boosting political pressure on Mr Burnham.
- Senior Labour ministers including Louise Haigh and Wes Streeting have voiced support for equalising CGT while critics warn higher rates could prompt people to delay sales, move assets overseas or otherwise change behaviour.
- Independent analyses differ sharply on the fiscal effect with an IG-based study suggesting a £7.8bn annual revenue loss and Treasury ministers declining to endorse proposals while insisting tax choices are for the Chancellor to set out at fiscal events.
- Policy makers must resolve technical and legal issues—CGT currently charges 18% and 24% versus income tax bands of 20%, 40% and 45% and the annual CGT allowance has fallen to £3,000—which could affect investment returns, housing markets and enforcement costs if changes proceed.