Maike Currie, VP Personal Finance at PensionBee, said: “Equalising Capital Gains Tax with income tax would represent a major shift in the UK’s approach to investment, savings and wealth creation and could have serious unintended consequences for the country’s already sluggish economic growth.
“Using higher CGT rates as a lever to raise more revenue for the Government is short-sighted, as such a move would work against the UK in the longer term, jeopardising investment at a time when the UK desperately needs capital flowing into the country, not out. Risking a capital flight and a reduction in the tax base would be a major own-goal.
“While the argument for fairness may resonate with some, capital gains are not the same as earned income. They are often the result of entrepreneurship, long-term investing, risk-taking and inflationary asset growth. Penalising investors, landlords and small business owners who reinvest those gains could stifle economic activity and innovation.
“There is also a wider confidence issue. After repeated cuts to allowances, frozen inheritance tax thresholds and plans to bring pensions into IHT from April 2027, savers and retirees already feel the goalposts are constantly moving.
“For many families, wealth is tied up in homes, pensions and businesses rather than spare cash. As leadership hopefuls compete to outbid each other with promises of ‘wealth taxes that work’, they should tread carefully to ensure the great wealth transfer does not slowly become wealth erosion.”
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