Reacting to: Chancellor rejects calls to raise Capital Gains Tax in Budget (BBC News) →
Chancellor John Healey has dismissed calls from senior figures in his own party to raise Capital Gains Tax, BBC News reported on 20 October 2026, deciding against equalising it with income tax ahead of the Budget on 28 October. For any business owner who has spent the autumn wondering whether selling shares, cashing in options, or handing the company to a son or daughter was about to get a lot more expensive, this is one entry on the list of worries that goes back to "no change" — at least for now.
That is worth taking seriously rather than filing away, because of what it would have cost if it had gone the other way. Capital Gains Tax is the tax that falls due the day you actually realise the value you've built: sell the business, sell the shares, sell a let property that isn't your home. Get the timing of one transaction wrong against a Budget and the bill on exactly the same sale can move by tens of thousands of pounds. So before anything else: the headline rate didn't move. What follows is why it didn't, what it would have cost if it had, and the one place where this story genuinely doesn't give you the all-clear.
What was actually being proposed
BBC News reports that two cabinet-level figures, Health Secretary Wes Streeting and Energy Secretary Louise Haigh, had both pushed for Capital Gains Tax to be raised to match income tax rates, before Andy Burnham became prime minister in July 2026. Haigh had argued, in an article for the Renewal journal, that equalising the two taxes would "shift the taxation burden away from punishing work, and towards unproductive capital accumulation which does little to grow the everyday economy." Streeting had made a similar case in May, calling for "a wealth tax that works" on the grounds that the current system penalises income from a payslip more heavily than income from an asset sale.
The gap between the two systems is the whole point of the argument. For 2026-27, Capital Gains Tax is charged at 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers. Income tax on the same amount of money, if it were taxed as income instead, reaches 40% in the higher-rate band and 45% above £125,140. Equalising the two would have meant, for a business owner selling up or cashing out, paying something closer to the income tax rate on a gain that is currently taxed at the lower Capital Gains Tax rate — a far bigger change than a one or two-point rate rise.
Worked numbers: what equalisation would have cost
Take an illustrative example: a higher-rate taxpayer disposing of shares with a gain of £120,000 that falls outside Business Asset Disposal Relief — a second business beyond the £1m lifetime BADR limit, a shareholding built up over several years, or an investment property that isn't a trading business at all. After the £3,000 annual exempt amount, the taxable gain is £117,000.
At today's 24% rate, the bill is £28,080. If Capital Gains Tax had been equalised with the 40% higher rate of income tax, the same gain would cost £46,800 — £18,720 more on exactly the same sale. If enough of the gain landed in the 45% additional-rate band instead, the bill rises to £52,650, a full £24,570 more than today. None of that changes anything about the business or the asset being sold; it is purely a function of which column of the tax system the gain is counted in. That is the scale of the decision BBC News reports Healey has stepped back from.
It's also worth putting a number on why. BBC News cites HMRC's own estimate that raising the higher Capital Gains Tax rate by 10 percentage points was forecast to cost the Treasury £3.6bn in 2028-29, once people changed their behaviour in response — moving abroad, or simply deferring a sale rather than triggering a large tax bill. The same estimate put the revenue from raising the lower rate by just 1 percentage point at only around £5m over the same period. When the Treasury's own modelling says a tax rise this size loses money rather than raises it, "we're not doing this one" is the more defensible position, whatever the politics around it.
What it means for you, by situation
If you're actively planning to sell a business, a shareholding, or an investment property in the next few months, this is reassurance you can act on now rather than wait on. The rate you'd pay today — 18% or 24%, or 18% flat under Business Asset Disposal Relief on the first £1m of qualifying trading business gains — is the rate BBC News reports the Chancellor intends to keep. Our piece on what the current Business Asset Disposal Relief rate costs on a trade sale runs through that calculation in full if a sale is genuinely on the table.
If you've been sitting on an unrealised gain specifically because you were worried the rate might jump at this Budget, that specific worry has eased. It hasn't disappeared entirely — nothing is law until 28 October — but the direction of travel reported here is towards stability on the headline rate, not a last-minute rise.
If your situation involves handing the business to a child rather than selling it on the open market, read this alongside our piece on the separate change reportedly being considered for family business handovers. That's a narrower, targeted proposal — closing a specific route that currently lets a retiring owner take Capital Gains Tax treatment on a handover to the next generation — and BBC News's report about the general rate staying put does not cover it. The two stories can both be true at once: the general rate holds, and a specific anti-avoidance change still goes ahead.
What's still uncertain, and when we'll know
The Budget date — 28 October 2026 — is confirmed; its contents are not, and we've set out what's already law for the current tax year in our guide to the twelve weeks before the Budget. BBC News reports this as Healey's settled intention based on briefings ahead of the Budget, not as something he has announced from the despatch box, and when Communities Secretary Angela Rayner was asked about it directly on BBC Breakfast, she declined to speculate on Budget contents at all. Burnham has also faced warnings against raising Capital Gains Tax more broadly from his former adviser, Goldman Sachs chief economist Lord Jim O'Neill, who has said it would send "the wrong message to business" — a signal that this decision has support beyond the Treasury. Separately, BBC News reports senior banking executives expect Healey to raise taxes on banks specifically, so a quiet Budget for Capital Gains Tax doesn't mean a quiet Budget for every sector.
Two things to do this week
First, if you're planning a disposal, check the current rates and reliefs directly on gov.uk's Capital Gains Tax rates page before you model anything, since reported intentions aren't the same as the finished Budget. Second, if a family succession is the plan rather than an open-market sale, don't treat this story as the all-clear on its own — read what's reportedly still under review for handovers specifically and get the numbers run before 28 October rather than after.
Modelling a disposal against the rates that actually apply, rather than the rate you're worried might apply, is exactly the kind of planning our tax planning service is built for. If you're weighing up the timing of a sale, talk to us before the Budget rather than after it.