Chancellor assesses capital gains tax hike in bid to fix £50bn black hole

The Chancellor is considering raising taxes on the sale of assets such as shares and property as he weighs ‘tough decisions’ to address a £50billion black hole in public finances.

He is also considering a tax increase on dividends, which would be a blow to entrepreneurs.

A source close to Jeremy Hunt confirmed the tax hikes were being considered but said no decision had yet been made – stressing that ‘we are two weeks away’ from the much anticipated autumn budget .

It comes as the country has been hit by gloomier economic news, with the Bank of England raising interest rates for the eighth consecutive time and the UK heading into what could prove to be the longest recession. for at least a century.

The Chancellor acknowledged the difficulties facing homeowners and businesses after the Bank raised its base rate on Thursday from 2.25% to 3%, the highest in 14 years.

He said there were problems affecting economies around the world, but in the UK Prime Minister Rishi Sunak would ‘fix’ the problems caused by Liz Truss and Kwasi Kwarteng in September’s ill-fated mini budget .

Downing Street also warned of ‘tough choices’ ahead on taxes and spending, but promised the government would ensure that ‘we act fairly, protect the most vulnerable and continue to seek growth at long term”.

One option on the table is an increase in the overall rate of capital gains tax – applied to profits from the sale or disposal of shares and other property, as well as changes to reliefs and allowances on the levy.

Resignation of Kwasi Kwarteng

The Chancellor acknowledged the difficulties facing owners and businesses (Stefan Rousseau/PA)

This would tend to mean a heavier burden for wealthier people, as they are more likely to own such assets.

Cuts to relief and benefits are the most likely, the Daily Telegraph reported, but a lot could still change ahead of the November 17 budget.

The newspaper also suggested the Chancellor is considering raising taxes on dividends and halving, or even cutting altogether, the £2,000 tax-free dividend allowance.

Mr Hunt assesses tax hikes and spending cuts as the new government seeks to put economic stability first in the wake of market chaos sparked by his predecessor’s calamitous £45billion tax giveaway .

In a sign of the seriousness of things at the height of the turmoil, the Governor of the Bank of England confirmed that the UK was only hours away from a possible total financial collapse following the mini-budget .

Andrew Bailey said the Bank was forced to act “quickly” and “decisively” to mitigate a “very real threat to financial stability” after markets spooked by the proposals.

Leave a Reply

Your email address will not be published. Required fields are marked *