Reeves refuses to rule out increase in Capital Gains Tax
Chancellor Rachel Reeves says the Labour Government has to "strike the right balance" on tax policy.
Chancellor Rachel Reeves has turned down the opportunity to rule out an increase in Capital Gains Tax.
She left the option open to raise CGT rates, which are charged on sales of properties which are not a main residence, and affects many landlords and investors.
Declined
“I want to bring that tax burden down because I want to make Britain the best place to start and grow a business, and I want working people to keep more of their own money in their pockets,” she said in an interview with Bloomberg TV.
But when asked about Capital Gains Tax, Reeves declined to rule out an increase, the Daily Telegraph reports.
It is always important when you’re deciding tax policy to strike the right balance.”
“It is always important when you’re deciding tax policy to strike the right balance,” she said, during a trip to the United States.
Around £15 billion is expected to be raised from CGT this year, rising to £23.5 billion in five years’ time, according to the Office for Budget Responsibility.
There will be an opportunity to raise CGT when the Budget is held on 30 October.
First-time buyers
Before the election, former Chancellor Jeremy Hunt challenged Labour leader Keir Starmer to rule out property tax increases if Labour won office at the General Election.
Hunt called on Starmer to match a Conservative pledge not to increase CGT or Stamp Duty.
But Labour has confirmed the decision to temporarily raise the threshold at which first time buyers pay Stamp Duty, will not be renewed. It currently sits at £425,000, but will return to £300,000 in April 2025.
How will raising CGT, one of the principal taxes on people who develop and build property and other forms of infrastructure for onward sale, encourage “the builders not the blockers”? There is absolutely no point in changing planning rules, purportedly in favour of sustainable development, if you force builders to pay higher CGT, say at income tax rates of 45%, and force them to pay ever-higher infrastructure and social housing taxes on top.. Development outside the largest sites and hefty subsidies will simply grind to a halt. SMEs in particular will die, and they will never get anywhere near 1.5 million new-builds.