Was the Chancellor right to rule out raising capital gains tax in the upcoming Budget?
Capital gains tax in 2026/27 is charged at 18% for gains within the basic rate band and 24% above it, with a £3,000 annual exempt amount. Rachel Reeves raised the rates from 10% and 20% at the October 2024 Budget. Ahead of the 28 October 2026 Budget, Chancellor John Healey was reported in October 2026 to have rejected a rise, though some reports say only equalisation with income tax was ruled out. Some Labour figures wanted CGT aligned with income tax, while critics warned this could drive wealthy people abroad and cut revenue.
3 Opinions
Its the right call, there is no free lunch here. In 2024 HMRC estimated that raising the higher CGT rate by 10 percentage points would actually lead to a £2.025bn decrease in revenue by 2027-28.
With the country’s financing in such a poor state all measures need careful consideration, noting the overall focus must be on cutting spending rather than further increasing taxation