UK Considering Equalising Capital Gains Tax with Income Tax at 45%
The Daily Telegraph reports[1] that the Labour government of the United Kingdom is currently considering an increase of the capital gains tax rate, with a potential “equalisation” of it with income tax at 45%.
The Daily Telegraph refers to a private submission paper by Labour grandee Dale Vince (who has been a key advocate for such a policy[2]), which suggests that such an increase/“equalisation”[3] will raise an additional £14 billion in capital gains tax revenue which can be used to fund £20 billion in fiscal transfers.
Capital gains tax was previously raised from 20% to 24% by Rachel Reeves as the UK Chancellor under Keir Starmer’s administration, resulting in a notable[4] increase in CGT receipts[5].
The increase in the headline CGT rate resulted in the departure of a significant number of technology entrepreneurs[6] since its passage in October 2024, according to Rathbones[7], the British wealth management firm.
A further increase in the CGT rate is expected to be accompanied by a corresponding “exit tax” for departing tax residents, prompting relocations that attempt to pre-empt this policy. One such high profile relocation is the relocation of British billionaire hedge fund manager Chris Rokos to Greece, with additional UK-based hedge fund managers assessing their options.
Notes
- Harry Brennan, ‘Burnham weighs £14bn capital gains tax raid: Dale Vince urges Prime Minister to raise levy to “give millions of people” a cost of living boost’ (The Daily Telegraph, 20 September 2026). https://www.telegraph.co.uk/money/tax/capital-gains/burnham-weighs-14bn-capital-gains-tax-raid/ · Archive 1. ↑
- Dale Vince, ‘Equalising Capital Gains Tax with Income Tax - is not a wealth tax. It’s an equalisation of two very different rates applied to the same thing - making money. Income tax is for those with a job, capital gains for those with money to invest. This is the first step we should take to creating a more fair tax system. Been arguing for it since 2020, in my book Manifesto - have my fingers and toes crossed.’ (LinkedIn, 19 July 2026). https://www.linkedin.com/posts/dalevince_equalising-capital-gains-tax-with-income-share-7484667721415114752--oJA/ · Archive 1 · Archive 2. ↑
- Richard Murphy, ‘Progress for the Taxing Wealth Report?’ (Tax Research UK, 21 September 2026). https://www.taxresearch.org.uk/Blog/2026/09/21/pogress-for-the-taxing-wealth-report/ · Archive 1 · Archive 2. ↑
- Tom Rees, ‘Reeves Reaps More Than £30 Billion From Higher UK Wealth Taxes’ (Bloomberg, 23 August 2026). https://www.bloomberg.com/news/articles/2026-04-23/reeves-reaps-more-than-30-billion-from-higher-uk-wealth-taxes · Archive 1. ↑
- Nikou Asgari, ‘HMRC reports record capital gains tax haul after Reeves’ rate rise: Data shows £24.2bn in receipts for the 2024/25 tax year, an 89% increase on previous year’ (Financial Times, 27 August 2026). https://www.ft.com/content/817369ed-a886-4cfe-8324-5391b7187591 · Archive 1. ↑
- Emma Agyemang & Emma Dunkley, ‘Nearly 6,000 entrepreneurs quit UK in past two years, say wealth managers: Most work in tech sector with top destinations the UAE, followed by Spain and the US, according to Rathbones’ (Financial Times, 21 February 2026). https://www.ft.com/content/f2f03212-c483-40ad-a534-5f6fa8e98379 · Archive 1. ↑
- ‘Tech sector leads exodus of 6,000 business owners: Nearly 6,000 UK business owners have left since 2024 as entrepreneurs seek opportunities abroad, adding up to a significant net outflow’ (Rathbones Group plc, 23 February 2026). https://www.rathbones.com/en-gb/wealth-management/media-centre/tech-sector-leads-exodus-6000-business-owners · Archive 1 · Archive 2. ↑