The next Government Budget is just around the corner, with Chancellor John Healey expected to announce a number of tax increases. It’s also expected that spending cuts will be announced, with potential hikes to capital gains tax, changes to income‑tax thresholds, and an expanded high‑value property levy. Not only this, but there could be changes to inheritance tax, and there may also be some reforms made to property taxes.
The Budget will take place on October 28 – it will be John Healey’s first as Chancellor. Andy Burnham has promised to make tackling the cost of living one of his main priorities. Addressing the Budget, the Prime Minister said the upcoming financial announcements will be “challenging”.
Changes to Capital Gains Tax could be one avenue explored in the Budget. An increase to Capital Gains Tax could be a revenue-raising measure for the government.
According to reports, rates could be increased to as much as 45%, reports The Independent.
Capital Gains Tax is paid on gains, or profit, made on the sales of assets such as shares, property or other items over £6,000. There are exceptions made for when people sell their primary residences and cars.
At the moment, it is paid at two rates: 18% for basic rate taxpayers and 24% for additional rate tax payers. The rates could be increased to mirror the Income Tax bands.
In 2009, Burnham drafted plans as health secretary to overhaul Inheritance Tax.
It has been reported that these plans could be revisited.
The plans could see Inheritance Tax scrapped for a 10% levy on all estates upon death to fund an NHS-style social care service.
Alternatively, the government may decide to tighten Inheritance Tax loopholes.
Burnham has backed property taxation being based on land valuations rather than the apparent headline value of property at sale – which could spell the end of stamp duty land tax and the consolidation of a previously-announced “mansion tax” into a new system based on up-to-date land valuations.
