Chancellor of the Exchequer John Healey has dismissed calls from some Labour MPs to increase Capital Gains Tax (CGT) when he hands down his first Budget.<\/p>\n
Cabinet ministers Wes Streeting and Louise Haigh both previously voiced support for raising CGT before Andy Burnham became prime minister in July. <\/p>\n
Ahead of next week’s Budget, Healey ruled out lifting CGT – which is imposed on the profit people make when they sell an asset that has increased in value, such as shares in a company or properties which are not primary residences.<\/p>\n
The move followed warnings that it could end up costing the government money if wealthy people leave the country or defer selling off assets, the Times newspaper reported.<\/p>\n
The chancellor has previously indicated he wanted the UK to be a country of wealth creation, saying government policies should lift confidence, investment and profit.<\/p>\n
Burnham has faced warnings against lifting CGT. His former adviser and Goldman Sachs Chief Economist Lord Jim O’Neill suggested it would send “the wrong message to business”.<\/p>\n
But, influential Labour figures had pushed for equalising CGT and income tax, with the former generally attracting a lower tax rate.<\/p>\n
Louise Haigh, a key ally of the prime minister, had suggested capital gains should go up to be closer to income tax, before she became Burnham’s first secretary of state.<\/p>\n
Defence secretary Wes Streeting called for a “wealth tax that works” in May, shortly after resigning as a minister in former Prime Minister Sir Keir Starmer’s government.<\/p>\n