Ed Wood, of Rathbones, added: “[Raising CGT rates] won’t raise tax revenue – increasing the rate doesn’t guarantee this. People will simply hold on to assets until the policy changes.”
Rob Lewis, of Celtic Financial Planning, said: “Corporate investors are sitting on their hands, waiting for clarity [on policy] to invest. That’s a problem for smaller companies which depend on that investment capital coming into markets.
“You can’t tax your way to growth – we should be encouraging people to take risks. The Government seems to be doing the opposite.”
Double death tax
Mr Burnham is also reportedly considering scrapping the CGT “uplift on death” rule in a move that could increase costs for bereaved families.
Currently, the lifetime gain of an asset is not subject to the tax on a person’s death, as it is levied from the time of death to the time of sale.
If the uplift were scrapped, it would add to the pressures investors face to sell assets earlier, according to Alex Shields, of financial planner The Private Office.
However, Mr Shields has cautioned his clients against acting on political speculation, citing the chaos that preceded Chancellor Rachel Reeves’s autumn Budget in 2024. At the time, it was rumoured that Ms Reeves was intending to cut the amount of money that could be withdrawn from a pension pot tax-free, triggering a surge in withdrawals.
He said: “Many people withdrew money anticipating a change that didn’t happen and should have left the funds alone. What happens if a new government reverses [CGT] changes?”
Labour was approached for comment.
