Chancellor Healey will not raise capital gains tax in Britain — The Guardian

UK Chancellor John Healey will not raise capital gains tax in the budget scheduled for October 28. As The Guardian reports, some government members, including Louise Haigh and Wes Streeting, had previously supported increasing this tax.

Risk of losing revenue

According to the newspaper's Treasury sources, Healey concluded that raising the rate could ultimately reduce budget revenues. Wealthy asset owners may postpone selling them or move assets out of the country.

Capital gains tax is levied on profits that individuals receive from selling assets that have increased in value, including second homes or shares. In previous discussions, some Labour Party representatives proposed aligning the rates of this tax with income tax rates.

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Possible tax for banks

Instead, the main source of additional revenue in the budget could be higher taxes on the profits of British banks. This comes amid substantial earnings by the financial sector due to higher interest rates: HSBC, NatWest, Barclays and Lloyds Banking Group have collectively made £200 billion in pre-tax profit over the past five years.

Healey is also, according to the newspaper, prepared to agree to a reduction in the budget reserve left by his predecessor Rachel Reeves. UK borrowing costs have risen significantly in recent weeks, alongside those of other major economies, which analysts believe could reduce the £24 billion reserve by about half.

Conservative Party leader Kemi Badenoch, for her part, will call on the government to cut public spending, including on welfare and the civil service, instead of raising taxes.