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\t\t\t<\/p>\n\t\t\tWednesday 22 October 2025 10:03 am\n\t\t\t<\/p>\n
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One of the UK\u2019s leading trading platforms has warned Chancellor Rachel Reeves that raising retail investor taxes could wipe billions off the stock market, undermining government attempts to boost domestic investing and strengthen the London market.<\/p>\n
According to research from trading platform IG,<\/a> a two percentage point increase in both dividend and capital gains tax (CGT),\u00a0 often viewed as easy revenue targets for the Treasury, could knock \u00a34bn off the value of London\u2019s leading index.\u00a0<\/p>\n The warning comes as speculation surrounding capital gain tax hikes grows, as the government repeated its commitment to not raise income tax, national insurance or VAT at the Labour party conference.<\/p>\n This has left the Treasury <\/a>scrambling to find other sources of capital to fill a \u00a320bn fiscal black hole.<\/p>\n Hiking dividends and CGT can make UK investments less profitable after tax,\u00a0ultimately decreasing the stock\u2019s valuation and making the FTSE less attractive to investors.<\/p>\n Michael Healy, managing director at IG, said: \u201cThe government has been clear about its ambition to shift the UK away from a savings-first mindset and encourage more Brits to invest, supporting the stock market and growing their wealth.<\/p>\n \u201cIf we want to build a nation of investors, we cannot make it less attractive to invest.\u201d<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tReeves and Goldman chief to pitch London to IPO candidates<\/a><\/p>\n \tNo pension tax tampering<\/p>\n IG also warned reducing the 25 per cent tax-free lump sum, totalling \u00a3268,275, from pensions could lead to a fall in pension contributions.<\/p>\n According to estimates from the Institute of Fiscal Studies, analysis found that cutting the lump sum amount to \u00a350,000 could reduce annual pension contributions by around \u00a3800m.<\/p>\n Meanwhile, a smaller reduction to \u00a3100,00 would result in a \u00a3300m fall in contributions.<\/p>\n