Capital gains tax is being considered as a revenue option for the chancellor's upcoming budget, building on significant rate increases since Labour came to power in 2024. The basic rate has risen from 10% to 18%, with higher-rate taxpayers now paying 24%, and revenue from CGT increased by 89% in 2024-25. There is substantial debate about whether to raise the rates further, with prominent support from across the Labour party and major thinktanks arguing that investment gains should be taxed more like earned income.

Current CGT rates are 18% for basic-rate taxpayers, 24% for higher-rate taxpayers, and 32% for carried interest in fund management. The UK's rates already exceed the OECD average of 20%. Supporters of equalising CGT with income tax rates (20% basic rate) include the Institute for Public Policy Research, the Centre for the Analysis of Taxation, the Resolution Foundation, and the TUC. However, business groups warn that further increases could discourage productive investment, drive capital flight, and increase tax avoidance, and some experts argue any rate rise must be accompanied by reforms to the tax base itself to be effective.