What's happened
Chancellor Rachel Reeves is expected to announce an increase in capital gains tax (CGT) in the upcoming budget on October 30, 2024. This change could significantly impact both wealthy investors and employees participating in share ownership schemes, raising concerns about its effects on the economy and investment climate in the UK.
Why it matters
What the papers say
According to Charlotte Gifford in The Telegraph, Rachel Reeves is expected to raise CGT, which could impact employees in share ownership schemes. Murray Tompsett from ProShare highlighted that many workers are already affected by reduced tax allowances. Meanwhile, Harry Stebbings, a tech investor, warned that a significant increase in CGT could drive entrepreneurs out of the UK, as reported by Dan Milmo in The Guardian. Conversely, Richard Partington noted that some millionaire business owners believe raising CGT would not deter investment, suggesting that entrepreneurs prioritize factors beyond tax rates.
How we got here
The UK government has been under pressure to address a fiscal shortfall, with Labour promising not to raise taxes on 'working people.' Recent cuts to the capital gains tax allowance have already affected many investors, particularly those in employee share schemes.
Common question
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What are the proposed changes to capital gains tax in the UK?
As the UK government grapples with a financial shortfall, Chancellor Rachel Reeves is considering significant changes to capital gains tax (CGT) in the upcoming budget. This potential increase has sparked a heated debate among investors, entrepreneurs, and business leaders about its implications for the economy and investment landscape in the UK. Below, we explore common questions surrounding these proposed changes.
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What are the economic impacts of increasing capital gains tax in the UK?
As the UK government considers a significant increase in capital gains tax (CGT), many are left wondering how this decision could reshape the economic landscape. With potential implications for investors, entrepreneurs, and public funding, it's crucial to explore the various angles of this debate. Below are some common questions regarding the potential effects of a CGT hike.
More on these topics
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Rachel Jane Reeves is a British Labour Party politician serving as Shadow Chancellor of the Duchy of Lancaster and Shadow Minister for the Cabinet Office since 2020. She has been the Member of Parliament for Leeds West since 2010.
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Her Majesty's Revenue and Customs is a non-ministerial department of the UK Government responsible for the collection of taxes, the payment of some forms of state support and the administration of other regulatory regimes including the national minimum wa