Healey rules out capital gains tax rise in budget
Chancellor John Healey has decided not to raise capital gains tax in next week's budget. The budget on 28 October will be his first as chancellor, and the decision was first reported by the FT and the Times. The Guardian
Treasury sources said Healey decided against a rise on the grounds it might cost the Treasury if wealthy individuals defer asset sales or move assets out of the country. The decision sets aside calls from inside the cabinet for an increase. First secretary of state Louise Haigh and defence secretary Wes Streeting had previously called for capital gains tax to rise.
Healey is expected to make raising tax on banks' profits the main revenue-raising measure in the budget. He intends to rely on a levy on bank revenues to fund the budget rather than increasing capital gains tax. Bloomberg
The UK's four largest lenders — HSBC, NatWest, Barclays and Lloyds Banking Group — generated £200bn in pre-tax profits over the past five years. Former chancellor Rachel Reeves had built a £24bn cushion against Labour's fiscal rules at the time of the last spring forecast.
Capital gains tax is currently charged at 18% for basic-rate taxpayers and 24%. Reuters It raised £24 billion in the 2025/26 tax year. Transfers of family businesses in the UK can currently be structured to attract the tax at a lower rate.
On 15 October, Healey had declined to say whether he would increase taxes on banks or raise capital gains tax. Conservative leader Kemi Badenoch is scheduled to give a speech on Tuesday calling for cuts to welfare and civil service spending instead of tax rises.
