Healey rules out capital gains tax rise in Budget

Chancellor John Healey has ruled out raising capital gains tax in next week’s Budget, rejecting calls from some Labour figures to bring it closer to income tax. He says he wants to avoid policies that could prompt investors to leave the UK or delay selling assets. [1]

Capital gains tax is charged on profits made when assets such as shares or second homes are sold. Its rates are generally lower than income tax, and some Labour MPs have argued for narrowing the gap.

Louise Haigh had called for capital gains to be taxed more like income before becoming Prime Minister Andy Burnham’s first secretary of state. Wes Streeting, now defence secretary, called in May for a “wealth tax that works”.

Healey had already ruled out equalising the two rates, the Financial Times reported. The BBC said his latest decision followed warnings, reported by The Times, that raising the tax could cost the government revenue if wealthy people left the country or deferred asset sales. [1]

Burnham has also faced opposition to a rise from his former adviser Lord Jim O’Neill, Goldman Sachs’ chief economist, who said it would send “the wrong message to business”, according to the BBC. [1]