# Chancellor Healey Rejects Capital Gains Tax Increase for October Budget

> UK Chancellor John Healey has decided against raising capital gains tax in the upcoming October 28, 2026 budget, despite previous calls from cabinet colleagues to do so.

By PrimaryBrief newsroom · Published 2026-10-20T07:46:20.593305Z
Canonical: https://primarybrief.com/article/chancellor-healey-rejects-capital-gains-tax-increase-for-october-budget-e4242f02

UK Chancellor John Healey will not increase capital gains tax (CGT) in the budget scheduled for October 28, 2026, a decision affirmed on October 20, 2026 [1][3][4]. This move comes despite prior advocacy for a CGT rise from prominent Labour figures, including First Secretary of State Louise Haigh and Defence Secretary Wes Streeting [1][3][8].

This decision directly impacts individuals who sell assets such as second homes or shares, as CGT is applied to the profits made from these transactions [1][5]. It also signals the government's economic strategy, prioritizing wealth creation and business confidence over potentially increased revenue from higher capital gains taxes [1][3].

## The Chancellor's Decision

John Healey's choice not to raise capital gains tax was reported by multiple sources on October 20, 2026 [1][2][3]. Treasury sources indicated that the Chancellor decided against an increase due to concerns that it could lead to wealthy individuals deferring asset sales or moving their assets out of the country, which might ultimately cost the Treasury revenue [1][3][4]. Current CGT rates are 18% for basic-rate taxpayers and 24% for higher-rate taxpayers on profits from asset sales [3][8]. This contrasts with income tax rates that can be as high as 45% [3]. Healey previously stated his desire for the UK to be a country of wealth creation, emphasizing that government decisions should raise confidence and investment in British business [1].

## Previous Calls for a CGT Hike

Before Healey's decision, cabinet colleagues Louise Haigh, the First Secretary of State, and Wes Streeting, the Defence Secretary, had advocated for raising capital gains tax [1][3][6]. Wes Streeting, in particular, had championed a rise on May 21, 2026, when he was serving as former health secretary [11]. He referred to it as a "wealth tax that works" and pointed to a growing disparity between earned income and other forms of wealth [11]. Streeting argued that the current system penalized work and was unfair, proposing to equalize the tax on assets and income [11]. Other Labour figures and think-tanks also supported higher CGT rates, arguing that it is wrong for wealthy individuals to pay a lower tax rate on asset sales compared to their income [3][12].

## The Treasury's Rationale

The Treasury's position, as explained by officials, is that raising CGT rates could prompt businesspeople to alter their behavior, potentially by leaving the UK or delaying asset sales [3]. This behavioral change could lead to a drop in revenue for the exchequer [3]. HM Revenue & Customs estimated that a 10 percentage point increase in the higher rate of CGT could reduce receipts by £3.6 billion in 2028-29, partly due to these "behavioral impacts" [3][12]. Business leaders had also warned against such a move, stating it could damage economic confidence [3][12]. Lord O'Neill of Gately, an adviser to Prime Minister Andy Burnham, cautioned that raising capital gains tax would send "very much the wrong message to business" [4][6][12].

## What we could not confirm

We could not confirm the specific alternative revenue-raising measures John Healey will present in the October 28 budget, beyond reports of an expected increase in taxes on banks' profits [1][4][8]. We also could not confirm the precise timing or details of any cost-of-living support package that the bank tax revenue is expected to fund [4][8].

## Evidence cited
1. Healey to reject calls to raise capital gains tax in budget (www.theguardian.com) — https://www.theguardian.com/uk-news/2026/oct/20/john-healey-no-capital-gains-tax-rise-budget
2. Chancellor reveals Budget secrets early – but why? (www.politico.eu) — https://www.politico.eu/podcast/politics-at-sam-and-annes/chancellor-reveals-budget-secrets-early-but-why/?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=RSS_Syndication
3. Britain’s £100,000 tax trap (ft.com) — https://www.ft.com/content/248b7408-b4cd-46aa-a829-a54c618e31fe?syn-25a6b1a6=1
4. UK Chancellor Healey rejects capital gains tax hike amid growth concerns (morningstar.com) — https://morningstar.com/news/alliance-news/2026-10-20-uk-chancellor-healey-rejects-capital-gains-tax-hike-amid-growth-concerns
5. Chancellor not expected to raise Capital Gains Tax significantly in Budget (www.thenegotiator.co.uk) — https://www.thenegotiator.co.uk/negotiator-news/chancellor-not-expected-to-raise-capital-gains-tax-significantly-in-budget/
6. Chancellor rejects calls to hike capital gains tax at Budget (itv.com) — https://itv.com/news/2026-10-20/chancellor-rejects-calls-to-hike-capital-gains-tax-at-budget
7. Healey rejects calls to hike capital gains tax in Budget (independent.co.uk) — https://www.independent.co.uk/news/uk/politics/john-healey-capital-gains-tax-budget-b2628469.html
8. Healey rejects calls to hike capital gains tax in Budget (cityam.com) — https://cityam.com/healey-rejects-calls-to-hike-capital-gains-tax-in-budget/
9. UK Chancellor Healey rejects capital gains tax hike amid growth concerns (youinvest.co.uk) — https://www.youinvest.co.uk/news-and-insights/news/uk-chancellor-healey-rejects-capital-gains-tax-hike-amid-growth-concerns
10. Autumn Budget 2026 predictions (pensionbee.com) — https://www.pensionbee.com/pensions-explained/uk-state-pension/autumn-budget-2026-predictions
11. Wes Streeting proposes ‘wealth tax that works’ by equalising tax on assets and income (theguardian.com) — https://www.theguardian.com/uk-news/2026/may/21/wes-streeting-wealth-tax-equalising-tax-assets-income
12. Chancellor expected to target banking sector, not CGT, in upcoming Budget (propertyindustryeye.com) — https://propertyindustryeye.com/chancellor-expected-to-target-banking-sector-not-cgt-in-upcoming-budget/
13. Healey rejects calls to hike capital gains tax in Budget (independent.co.uk) — https://www.independent.co.uk/news/uk/politics/john-healey-budget-kemi-badenoch-ipsos-poll-b2628469.html
14. Breaking News! Tory Leader Kemi Badenoch Unveils £70bn Savings Plan and Welfare Crackdown. (youtube.com) — https://youtube.com/watch?v=kY-DqP3h4Qo
15. Kemi Badenoch to warn John Healey of 'fictional' spending cuts at debut Budget (express.co.uk) — https://express.co.uk/news/politics/1961448/Kemi-Badenoch-John-Healey-budget-spending
16. Kemi Badenoch to accuse Labour of playing 'fast and loose' with the nation's finances (the-independent.com) — https://the-independent.com/uk/politics/kemi-badenoch-andy-burnham-john-healey-conservatives-economy-b2628479.html
17. John Healey rejects calls to raise capital gains tax in Budget amid £3.6bn warning (birminghammail.co.uk) — https://birminghammail.co.uk/news/midlands-news/john-healey-rejects-calls-raise-30467571
18. UK Chancellor Rejects Capital Gains Tax Hike For October Budget - Report - Global Banking & Finance Review (globalbankingandfinance.com) — https://globalbankingandfinance.com/uk-chancellor-rejects-capital-gains-tax-hike-for-october-budget-report/
19. Budget arithmetic (substack.com) — https://substack.com/home/post/p-142273105
20. News & Polls (ipsos.com) — https://ipsos.com/en-uk/news-and-polls
21. (May 21 2026) Former British ⁠health minister Wes Streeting, a ⁠potential candidate for the leadership of the Labour Party, said he backed the introduction of tax changes which would equalise capital gains tax with income tax to make the system “fairer”. (scmp.com) — https://scmp.com/
22. (May 21 2026) The Labour leader contender is proposing to equalise CGT with income tax. Tax experts have warned that Labour leader contender Wes Streeting's pledge to align capital gains tax with income tax could have unintended consequences. (international-adviser.com) — https://international-adviser.com/
23. (May 21 2026) The former health secretary Wes Streeting has set out plans for a “wealth tax that works”, by equalising tax on assets and income. Streeting said the current system – in which capital gains tax is generally much lower than income tax – was not fair and penalised work. (theguardian.com) — https://www.theguardian.com/
24. (May 21 2026) Wes Streeting proposes 'wealth tax that works' CGT overhaul. Labour leadership hopeful outlines CGT reform plans. Jenna Brown. clock 21 May 2026 • 5 min read. Share. twitter-icon · linkedin icon · email-icon · facebook-icon · whatsapp-icon. Ex-health secretary Wes Streeting. Image: Ex-health secretary Wes Streeting. Ex-health secretary Wes Streeting has laid out his plans for a “wealth tax that works” as part of his pitch for the Labour leadership, the BBC reports. (professionaladviser.com) — https://professionaladviser.com/
25. (May 21 2026) PA Wire. Sophie Wingate. 21 May 2026. WEST END FINAL. News Briefings. Get our award-winning daily news email featuring exclusive stories, opinion and expert analysis. Sign up. I would like to be emailed about offers, event and updates from Evening Standard. Read our privacy notice. Former health secretary Wes Streeting has set out plans for a wealth tax that would see capital gains tax equalised with income tax. (standard.co.uk) — https://www.standard.co.uk/