Speculation has increased over the weekend that the Chancellor is considering a rise in capital gains tax to help pay for government spending.
According to the weekend papers, Rachel Reeves is considering bringing CGT rates in line with income tax – a move that was previously investigated by the Office for Tax Simplification in 2020.
Reeves will speak today at 3:30 p.m.
She is expected to highlight a £20bn hole in the public finances and announce a budget date.
The 2022/23 tax year was a record year for CGT, with revenues of £17 billion. According to Hargreaves Lansdown, the increase has quadrupled in ten years.
However, Cabinet Office Minister Pat McFadden has said there will be no announcement on CGT today and no tax changes will be unveiled before the Budget.
He told Times Radio: “Today is not a budget, people should not expect tax announcements today.
“We said a number of things about taxes during the election, we said we would not increase the rates of income tax, national insurance and VAT.
“Those things still apply.
“Today you will hear how we will respond to the opening of the books.
“And I think what people should not expect today is not tax measures, but a chancellor who is prepared to make some very difficult decisions on spending, to show that we put financial stability first and that we take that seriously as the basis for economic growth.”
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Speculation about capital gains taxes has intensified.
“As Rachel Reeves peers into the hole in the public finances and is about to reveal just how deep it goes, rumors are swirling about whether CGT changes could be used to generate extra money to help fill it.”
But bringing CGT in line with income tax would lead to a “shocking rise for British investors”, with the risk of more people hoarding their profits until they die.
She says: “This would mean, for example, buy-to-let investors refusing to part with properties they don’t really want in an attempt to avoid CGT, while first-time buyers in the property market struggle to get onto the property ladder .”