Healey to Reject CGT Increase in Budget

Source reports published 20 Oct 2026, 10:00 am – 11:31 am AEST

Chancellor John Healey has decided not to increase Capital Gains Tax (CGT) in the upcoming budget, despite previous calls from cabinet colleagues. The decision is based on concerns that raising CGT could discourage investment or lead to capital flight.

What happened

• Chancellor John Healey will not increase Capital Gains Tax (CGT) in next week’s budget, according to Treasury sources and reports in the Financial Times and The Times.
• This decision follows previous support for raising CGT from cabinet ministers including Louise Haigh and Wes Streeting.
• Healey’s rationale is that increasing CGT could negatively impact the economy if wealthy individuals defer selling assets or move them out of the country.
• The tax, applied to profits from selling assets like shares or properties, is currently charged at 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers.
• Previously, Lord Jim O’Neill, a Goldman Sachs Chief Economist and Burnham’s former advisor, warned that raising CGT would send the ‘wrong message’ to business.
• Healey emphasized his desire to foster wealth creation and investment within British business, stating, "I want to see this country as a country of wealth creation."
• Several Labour figures, including Louise Haigh and Wes Streeting, had advocated for equalizing CGT with income tax.
• However, the government is now prioritizing taxing bank profits, given the sector’s substantial earnings.
• Kemi Badenoch, the Conservative leader, is expected to urge spending cuts instead of tax increases.
• The government’s options for raising revenue are limited due to its fiscal rules and the backdrop of rising interest rates.

Original reporting

• BBC: Chancellor rejects calls to raise Capital Gains Tax in Budget
  2026-10-20T01:31:09.201000+00:00
• Guardian: Healey to reject calls to raise capital gains tax in budget
  2026-10-20T00:00:00+00:00