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EconomyReported

Capital gains tax: how it works, and the arguments for and against another rise

Raising capital gains tax is one of the options being considered by the chancellor as he prepares next month's budget.

· 1 min read · language: en
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— The Guardian — Business

Capital gains tax (CGT) has been widely cited as a possible revenue-raiser as the chancellor, John Healey, prepares to deliver a budget next month, according to the Guardian.

CGT is a tax levied on the profit made when an individual sells an asset that has increased in value, such as shares, property that is not a main home, or other investments. The rate paid depends on the type of asset and the seller's overall income.

Supporters of raising CGT argue it could generate additional revenue for the government without directly increasing taxes on wages, and that it targets gains rather than income from work.

Critics counter that higher CGT rates can discourage investment and asset sales, potentially reducing the amount of revenue actually collected, and may disproportionately affect small business owners and long-term investors.

Increasing the rate of CGT is one of several levers available to the chancellor as he weighs options to raise revenue ahead of the budget.

Capital Gains TaxEconomyJohn HealeyTaxationUk Budget

Sources

EGazette summarizes reporting from multiple sources; follow the links for the originals.

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