Jeremy Hunt poised to launch capital gains tax raid to fill huge £50bn black hole

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Jeremy Hunt is set to launch a capital gains tax (CGT) raid as the Chancellor looks to plug a £50billion black hole in the public finances. Mr Hunt is reportedly considering an increase in the headline rate of the tax which is paid on the sale of assets which are investments such as shares and second properties.

The Chancellor, who was parachuted into Number 11 last month following economic turmoil in the wake of the mini-budget, is also considering an increase in dividend taxes and slashing the £2,000 tax-free dividend allowance.

A source close to Mr Hunt reportedly confirmed the tax hikes were under consideration

But the source insisted no decisions had yet been taken, stressing there are still two weeks until the highly-anticipated autumn Budget.

It comes as the country is facing a bleak economic prospect with the UK heading into what could prove the longest recession in at least a century.

Meanwhile, the Bank of England yesterday hiked interest rates for the eighth time bringing more misery to mortgage holders.

The Daily Telegraph reported that cuts to CGT reliefs and allowances are most likely.

But an increase in the headline rate of the tax is also on the table due to the size of the crater in the public finances.

A CGT raid would mean a greater burden on wealthier people as it is applied to profits of the sale or disposal of shares and second properties and they are more likely to own such assets.

Mr Hunt is weighing up tax hikes and spending curbs as the new Government seeks to put economic stability front and centre in the wake of the market chaos sparked by Liz Truss and Kwasi Kwarteng’s disastrous £45 billion tax giveaway in the September mini-budget.

The Chancellor said yesterday that new PM Rishi Sunak had committed to “fixing” the economic problems.

He said: “On the steps of Downing Street the Prime Minister recognised that and said he was there to fix that and, when I became Chancellor, within a couple of days I reversed the measures in the mini-budget.

“So we are taking the difficult decisions. At the top of our minds are families, businesses, and people who are worried about jobs, about bills to pay.

“We want to do what we can to help them but we recognise that the biggest single thing we can do is to help the Bank of England bring down inflation.”

He said that meant producing “national accounts that balance”, showing people “we have sound money in this country”.

He added: “We are doing the same things we are asking families to do, up and down the country.”

Downing Street also warned of “difficult choices” to come on tax and spending.

But No 10 pledged the Government would ensure that “we are acting fairly, protecting the most vulnerable and continuing to seek long-term growth”.

The Treasury declined to comment.

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