During a recent visit to the US and Canada, Rachel Reeves was asked whether she was considering increasing Capital Gains Tax (CGT).
She replied:
“We’ve got a budget on October 30 2024 and we will set out our policy then, but it’s always important when you’re deciding tax policy to strike the right balance. Of course, you need to bring in the revenue to fund public services, but we’ve also got to grow the economy. I won’t do anything that makes it harder to achieve that economic growth and prosperity.”
The Chancellor has ruled out raising VAT, Income Tax rates or National Insurance rates but speculation is mounting on whether other taxes – such as CGT and Inheritance Tax (IHT) will be increased and/or reliefs removed.
Last year, Ms Reeves told the BBC that she had no plans to increase CGT. However, since the Labour party came into office, she has claimed that there is a £22 billion shortfall in public finances and it would seem likely that the gap will need to be plugged by raising taxes somewhere.
It is hard to predict whether there will be any changes to CGT and/or IHT but it is possibly quite telling that Ms Reeves has not ruled it out …
If you are thinking about disposing of an asset – by sale or gift – and would like to know what the likely tax consequences will be under current legislation, read our blog here.
If you are concerned about the potential changes to CGT, IHT and other taxes and would like to discuss your thoughts and future plans, please call one of our private client tax advisers on 01223 810100 for help and advice.
