Overview
- Wes Streeting has publicly endorsed a plan to raise capital gains tax to the same rates as income tax, a policy promoted by the Centre for the Analysis of Taxation and supported by some Labour Growth Group MPs.
- City tax advisers warned the announcement could prompt investors to crystallise gains or sell assets ahead of reform, a reaction that could disrupt markets and cut expected receipts.
- Proponents say the package would include an investment allowance and the removal of uplift at death to protect entrepreneurs and use proceeds to finance cuts such as lower employee national insurance.
- Independent estimates diverge sharply: Centax projects about £14 billion in extra revenue while calculations attributed to HMRC suggest a £5.7 billion loss, and the OBR has warned forecasts are highly uncertain.
- Practical obstacles persist because gains can be deferred by not selling assets, valuing private businesses is complex, and HMRC lacks infrastructure to treat aligned CGT as a straightforward wealth levy; similar debates have followed past UK CGT reforms.