+44 (0) 1908 774323
   
Helen Beaumont

Essendon Tax

Independent tax consultants ...

The Dangers of Raising Capital Gains Tax Rates at the Autumn Budget

Helen Beaumont

CREATED BY HELEN BEAUMONT

Published: 25/06/2025 @ 09:00AM

#capitalgainstax #taxratesdebate #cio #economicrecovery #autumnbudget

The debate surrounding Capital Gains Tax rates intensifies as the Chancellor approaches the Autumn Budget. While potential increases aim to address fiscal challenges, history suggests that drastic rate hikes may hinder rather than help economic recovery ...

Capital gains tax, A burden on our wallets, But a must for growth

Capital gains tax, A burden on our wallets, But a must for growth

The prospect of increasing Capital Gains Tax (CGT) rates has resurfaced as a key policy discussion. The Chancellor, amidst pressing budgetary concerns, might be eyeing CGT as a way to shore up financial deficits. However, there exists a substantial risk that this course of action could have adverse repercussions on both taxpayer behaviour and overall economic activity.

Historically, CGT rates have faced scrutiny, particularly given their reliance on a small pool of high-value taxpayers!

In the financial year leading up to the 5th of April 2023, just 2,000 individuals were responsible for a staggering 37% of all CGT revenues, highlighting a diametric relationship between a few taxpayers and the tax's revenue generation. Many of these individuals realised substantial gains from the sale of unlisted shares, a trend that underscores where the bulk of CGT revenue is derived.

The notion of raising the main CGT rate from its current level - recently increased from 20% to 24% - to align more closely with higher income tax thresholds has been floated within Treasury discussions. However, significant hikes, such as the proposed 39% modelled by officials last year, could inadvertently disincentivise investment and alter individual behaviour significantly.

For many high earners, the potential for a heavier capital gains tax burden may yield a strategic re-evaluation of their investment behaviours, or worse, prompt them to leave the UK entirely and seek tax shelters or alternative jurisdictions.

The concentration of CGT liabilities among a small fraction of the population raises alarms about the efficacy of rate increases. Should the Chancellor implement a larger rise in CGT, it is conceivable that many within this taxpayer bracket may respond by altering their investment strategies, such as delaying sales or withdrawing from the market altogether. The unpredictable nature of such adjustments could ultimately lead to a decline in economic activity, resulting in a net loss of tax revenues rather than the intended financial windfall.

Policymakers must also consider the possible societal
implications of increasing CGT rates!

Many of the individuals affected are business owners who may be contemplating transitions involving the sale of their companies. A burgeoning Capital Gains Tax burden could dramatically affect their decisions, potentially stifling entrepreneurial activities and obstructing new business ventures. This could have a cascading effect, limiting job creation and job security across the economy.

Although the need for increased tax revenue is a pressing concern, a hurried approach could yield unfavourable outcomes. Increasing CGT rates may indeed fill financial gaps in the short term, but such measures risk alienating a vital sector of the economy that plays an essential role in wealth generation and employment.

Balancing the budget should not come at the cost of strangling economic growth.

Until next time ...


HELEN BEAUMONT
Join my mailing list! Click here and be one of the first to know when I publish a new blog post!

Would you like to know more?

If anything I've written in my blog post resonates with you and you'd like to discover more of my thoughts about Capital Gains Tax and whether the Chancellor should raise them at the Autumn Budget, then do feel free to call me on 07434 287603 and let's see how I can help you.

Share the blog love ...

Share this to FacebookBuffer
Share this to FacebookFacebook
Share this to TwitterTwitter
Share this to Linkedin (popup window)Linkedin
Share this to Pinterest (popup window)Pinterest
Share this to WhatsApp (popup window)WhatsApp

#capitalgainstax #taxratesdebate #cio #economicrecovery #autumnbudget

About Helen Beaumont ...

Helen Beaumont 
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.

More blog posts for you to enjoy ...

Click here to view this blog post


HMRC Taking A Good Look At Savvy Online Sellers

HMRC's new data sharing initiative, which aligns with the OECD's global objective to tackle tax evasion, has been met with mixed reactions from online sellers ......

Click here to view this blog post


Why Inheriting A Pension Could Become Painfully Taxing

From 2027, inheriting a pension may drag funds into IHT and sometimes income tax. My blog post this week explains the rules, deadlines, and the RNRB trap. It outlines practical steps to mitigate exposure while keeping family ...

Click here to view this blog post


Rethinking Taxation: The Case for Taxing Income from Wealth, Not Work

As debates on taxation intensify, the effort to transition toward taxing income from wealth rather than work emerges as an intriguing policy alternative, potentially reshaping the fiscal landscape in the United Kingdom ......

Click here to view this blog post


HMRC Warns Against Stamp Duty Rogue Agents: Stay Vigilant!

Following a recent Court of Appeal ruling, HMRC has announced a crackdown on fraudulent Stamp Duty repayment claims. Homebuyers are advised to avoid rogue agents touting misleading schemes that could result in significant pen...

Click here to view this blog post


The Ins and Outs of Employing Young People

The first thing to consider when employing young people is their age. Children under the age of 13 are not allowed to work except in certain circumstances. However, there are a number of restrictions for all individuals under...

Click here to view this blog post


Unpacking the Property Tax Advantages of Being Married

Marriage offers profound property tax advantages, affecting Income Tax, Capital Gains Tax, Inheritance Tax, and more. Couples can maximise reliefs, allocate income wisely, and transfer assets without incurring tax liabilities...

Click here to view this blog post


Exploring Alternatives to a Wealth Tax: Practical Solutions for Raising Revenue

As pressure mounts to introduce a Wealth Tax in the UK, innovative tax strategies could pave the way for increased revenues. In this blog post, I'll examine options such as Capital Gains Tax reforms, Inheritance Tax simplific...

Click here to view this blog post


New Regulations to Fine Crypto-Investors £300 for Non-Disclosure

With the introduction of the OECD Cryptoasset Reporting Framework, UK crypto-investors will be subject to stricter regulations. Starting from January 2026, they must disclose personal details and cryptocurrency transactions t...

Other bloggers you may like ...

Click here to view this blog post


The Rise Of Workation Stays In Milton Keynes: Why Serviced Apartments Win

Posted by Emily Freeman on https://blog.shortstay-mk.co.uk

Explore how workation stays in Milton Keynes combine productivity with leisure. See why serviced apartments beat hotels and Airbnbs for longer, flexib ...

Click here to view this blog post


Calibrate Your Career Compass To Plan Your Next Move

Posted by Dave Cordle on https://blog.davecordle.co.uk

Learn to use your career compass to assess your skills, values and goals. Map the landscape, test options, and build momentum. Make your next move a d ...

Click here to view this blog post


What's Changing For Employee Car Ownership Schemes And Company Vehicle Tax?

Posted by Roger Eddowes on https://blog.essendonaccounts.co.uk

HMRC is tightening the rules for employee car ownership schemes from October 2026. It also remains crucial to classify vehicles correctly for tax. Thi ...

Click here to view this blog post


The Art Of Bowing Out Gracefully

Posted by Jacky Sherman on https://www.jackysherman.com

Conceived on your kitchen table, down the pub, after a particularly frustrating meeting with your boss, or that awful moment when you were told you we ...

Click here to discover sBlogIt! The done-for-you blogging service