Chancellor John Healey has reportedly ruled out increasing Capital Gains Tax (CGT) in the Budget scheduled for Wednesday 28 October. This decision, reported by the Financial Times and The Times, suggests existing CGT rates will remain unchanged, dismissing earlier proposals to align CGT with income tax.
The move offers reassurance to landlords, property investors, and owners considering selling second homes. Warnings had suggested that higher CGT rates could discourage property sales, delay investment, and potentially reduce Treasury revenues.
HM Revenue & Customs previously estimated that a 10 percentage point increase in the higher CGT rate could reduce receipts by £3.6bn in 2028-29, reflecting anticipated changes in taxpayer behaviour. Business leaders, including Lord Jim O’Neill, a former adviser to Prime Minister Andy Burnham, also cautioned that higher rates could deter investment.
Mr Healey will deliver his first Budget under Prime Minister Andy Burnham next week. While the reported decision removes the immediate prospect of higher CGT rates, uncertainty remains regarding other potential property-related tax changes in the Budget.