13 October 2026
If you are covering reports that Chancellor John Healey will resist calls to raise capital gains tax to the same level as income tax, please see the following comment from Rachael Griffin, tax and financial planning expert at Quilter:
“Equalising capital gains tax with income tax rates might have appeared to offer a straightforward way to raise revenue while adhering to Labour's manifesto pledge not to raise taxes for working people. In reality, investor behaviour plays a significant role in determining how much tax is ultimately collected. Capital gains tax is particularly sensitive to behavioural change and, if rates were pushed significantly higher, many investors may simply choose to hold assets for longer rather than crystallise gains.
“Indeed, one of the risks of sharply increasing CGT rates is that it reinforces a "hold until death" mindset. Rather than selling assets and triggering a tax charge, individuals may opt to retain them indefinitely and pass them on through their estate, benefiting from the capital gains tax uplift on death. That can reduce transactions, limit the recycling of capital and ultimately mean revenues fall short of expectations.
“It will also be interesting to see what future CGT receipts reveal. The debate around potential tax changes ahead of recent Budgets has often prompted investors to bring forward disposals and crystallise gains before any reforms take effect, boosting receipts in the short term before activity subsequently cools.
“If reports are correct, the Government deserves credit for providing greater certainty ahead of the Budget. Pre-Budget speculation can lead investors to accelerate transactions or defer decisions, creating economic distortions that are unlikely to be in anyone's interests. Clear signalling helps support better long-term financial planning.
“Ultimately, the challenge for policymakers is not just setting a tax rate that looks attractive on paper, but ensuring it raises sustainable revenues without discouraging investment, entrepreneurship and the efficient movement of capital through the economy. The evidence suggests that when it comes to capital gains tax, behaviour matters just as much as the headline rate.”
