Chancellor John Healey is expected to announce tax increases in the upcoming Budget, with potential hikes to capital gains tax, changes to income-tax thresholds, and an expanded high-value property levy. There could also be changes to inheritance tax and reforms to property taxes. The Budget will take place on October 28, marking Healey's first as Chancellor.
Capital Gains Tax changes
Changes to Capital Gains Tax could be an avenue explored in the Budget, with an increase potentially serving as a revenue-raising measure. According to reports cited by The Independent, rates could be increased to as much as 45%.
Capital Gains Tax is paid on gains, or profit, made on the sale of assets such as shares, property, or other items over £6,000. Exceptions apply when people sell their primary residences and cars. Currently, it is paid at two rates: 18% for basic rate taxpayers and 24% for additional rate taxpayers. The rates could be increased to mirror the Income Tax bands.
Inheritance Tax speculation
There is speculation over what changes could be made to Inheritance Tax. In 2009, Burnham drafted plans as health secretary to overhaul Inheritance Tax, and 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.
Property tax reforms
The Morning Star reports that Andy Burnham wants property taxation to change. Burnham has backed property taxation 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.
Prime Minister Andy Burnham has promised to make tackling the cost of living one of his main priorities. Addressing the Budget, he said the upcoming financial announcements will be "challenging".
