Rachel Reeves is set to introduce changes in her upcoming Autumn Budget, affecting capital gains tax.
- The capital gains tax on share sales is expected to rise by several percentage points.
- The current rate of 20% on profits from share sales will be increased, excluding second homes.
- Reeves plans to remove certain tax reliefs to help address a £22bn fiscal deficit.
- Government sources predict the policy could generate revenue in the ‘low billions’.
Rachel Reeves is anticipated to make significant amendments to the existing capital gains tax framework in her inaugural Autumn Budget. The primary focus of these changes will be on raising the tax rate applicable to the sale of shares and other assets, while notably excluding the sale of second homes from this increase. Currently, the tax on profits earned from share sales stands at 20%, a figure that is expected to see an increment by several percentage points according to insiders at The Times.
This proposed tax hike marks a strategic move by Reeves to eliminate a series of reliefs, pairing this with the increased tax rate as part of her broader agenda to accumulate funds necessary for addressing the considerable £22bn fiscal deficit inherited by her administration. The alteration in tax policy is predicted to yield revenues in the ‘low billions’, indicative of the scale at which these changes are projected to impact government finances.
Despite the circulating reports, official commentary from the Treasury remains non-specific, as highlighted by a spokesperson’s statement: “We do not comment on speculation around tax changes outside of fiscal events.” This approach reflects a standard government stance to refrain from pre-empting official fiscal announcements, maintaining a stance of ambiguity amidst growing speculation.
These anticipated measures by Reeves are pivotal in reshaping fiscal policy to address the existing economic challenges.
