“A proposed capital gains tax (CGT) hike by Rachel Reeves may cost the Treasury £2 billion, according to analysis. Economists warn that targeting investors, as anticipated in the upcoming Budget, could harm economic growth. Higher CGT rates could lead investors to avoid transactions, resulting in fewer property sales and reduced stamp duty revenue. Experts argue that increasing CGT often leads to investors delaying sales until the tax rate decreases, negating any revenue gains. Former Treasury officials and tax professionals highlight the risks of disincentivizing investment, which could stifle long-term growth. While the Treasury acknowledges difficult decisions lie ahead, the economic implications of CGT reforms are under scrutiny.”
Quotation by Nigel Holland.
- CGT hike could cost the Treasury £2 billion, impacting economic growth.
- Investors may avoid transactions, reducing property sales and stamp duty revenue.
- Higher taxes often lead investors to delay asset sales until rates drop.
- Economists warn that disincentivizing investment could harm long-term growth.
- Treasury analysis suggests potential revenue of £6 billion per year from CGT reforms.