Chancellor John Healey will present the Budget next week.
Chancellor John Healey will not increase capital gains tax in next week’s Budget despite pressure from some of his Cabinet colleagues.
Wes Streeting and Louise Haigh have been among those wanting to see a rise in the tax imposed on the profit made when an asset has been sold, such as shares in a company or second homes.
Mr Healey has been persuaded that retaining wealth and keeping a lid on tax is a key route to encouraging investment.
He has been warned that wealthy people would leave the country or defer selling assets, according to The Times.
In a speech last month, he said: “I want to see this country as a country of wealth creation. I want our government decisions and policies to raise the levels of confidence, and investment, and profit in British business.”
Former Goldman Sachs chief economist Lord Jim O’Neill, an adviser to Andy Burnham, has said that “raising capital gains tax would send very much the wrong message to business.”
The decision will be a setback for Ms Haigh, First Secretary of State and a key ally of the prime minister, who wanted the gap between the lower CGT rate and income tax to be closed.
Defence Secretary Wes Streeting previously advocated increasing capital gains tax while keeping open the option of lower rates for entrepreneurs to encourage them to continue to take risks.
Capital gains tax is charged at 24% for higher-rate taxpayers on profits from the sale of assets compared with up to 45% for income tax in England and 48% in Scotland.
It also means the biggest income gain in the budget will be higher taxes on banks, which will be diverted into tackling the cost of living.
Mr Healey is expected to cut energy costs for manufacturers and crack down on online retailers, such as Amazon, eBay and Temu, which will be made responsible for collecting tax owed by retailers selling on their platforms.
The revenue raised will be used to ease pressures on smaller businesses, likely to include taking more out of paying business rates.
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