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What are the proposed changes to capital gains tax?
Chancellor Rachel Reeves is expected to announce an increase in capital gains tax rates on October 30, 2024. This change aims to address a projected fiscal shortfall and could significantly impact both wealthy investors and employees involved in share ownership schemes.
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How might a capital gains tax hike affect investors?
An increase in capital gains tax could lead to reduced investment activity among high earners and entrepreneurs. Many investors fear that higher taxes may deter them from making new investments or encourage them to relocate to countries with more favorable tax regimes.
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What are experts saying about the potential economic fallout?
Experts are divided on the potential economic impact of raising capital gains tax. While some argue it could lead to a decrease in investment and economic growth, others believe that a fairer tax system could support public services without deterring investment.
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Could this lead to a talent exodus from the UK?
There are growing concerns that an increase in capital gains tax could trigger a talent exodus from the UK, particularly among tech entrepreneurs and high-net-worth individuals. Many fear that the prospect of higher taxes may incentivize them to relocate to countries with lower tax burdens.
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What do millionaire business owners think about raising CGT?
A group of millionaire business owners has expressed that raising capital gains tax would not necessarily deter investment. They argue for a fairer tax system that could help support public services while still encouraging economic growth.
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What are the implications for employees with shares in their companies?
Employees participating in share ownership schemes may also be affected by the proposed changes to capital gains tax. Higher taxes could reduce the financial benefits of these schemes, potentially impacting employee morale and retention.