New Conservative analysis of Treasury data suggests that a further increase in capital gains tax (CGT) on Britain’s wealthiest individuals would ultimately lead to the government losing money. Internal government modelling reportedly indicates that the top rate of CGT is already too high, and hiking it further would result in lower tax receipts.
Figures presented to the Labour government before its first Autumn Budget in 2024 showed that the Treasury assumed it would raise less from investors, businesses, and landlords through CGT as the tax burden increased. Tory analysis suggests that the tipping point for CGT is when it is levied at 22 per cent, as higher rates may deter people from selling assets such as businesses, shares, and second homes.
Shadow Chancellor Mel Stride commented on X, stating that "HMRC’s own estimates show increasing capital gains tax would lose the Treasury money." He added that despite this, Labour cabinet ministers and think tanks are still advocating for it, suggesting the reason for a tax raid is an "ideological war on wealth creation."
Current CGT rates are 18 per cent for basic rate taxpayers and 24 per cent for higher and additional-rate taxpayers, following an increase from 20 per cent by former chancellor Rachel Reeves. While record amounts of capital gains tax, £127bn, were recorded in the 2024/25 tax year, an 82 per cent increase from the prior year, Chancellor John Healey is reportedly facing pressure to increase the CGT burden further.