Chancellor John Healey Considers Capital Gains Tax Hike

Chancellor John Healey is considering an increase to the capital gains tax (CGT) as a primary revenue-raising measure for the upcoming budget on October 28. Current rates are 18% for basic-rate taxpayers and 24% for higher-rate taxpayers, following previous increases implemented by former chancellor Rachel Reeves.

Labour politicians and various think tanks advocate for equalizing CGT with income tax rates to shift the tax burden from labor toward capital accumulation. This push follows reports from HM Revenue & Customs showing an 89% increase in CGT revenue for the 2024-25 period.

Business lobby groups, including the British Chamber of Commerce, oppose the move, warning that higher rates create investment uncertainty and may encourage high-net-worth individuals to leave the United Kingdom. The final decision depends on fiscal forecasts from the Office for Budget Responsibility, which are currently affected by rising borrowing costs and high energy prices.