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Private equity firms are nervously awaiting the government’s first budget after Rachel Reeves refused to rule out a rise in capital gains tax.
Last week the Chancellor of the Exchequer warned that tough decisions are needed to plug a £22bn budget black hole that was discovered after Labour won an election last month.
Asked whether the capital gains tax would increase, Reeves told Bloomberg: “It’s always important when you’re deciding tax policy to get the balance right.”
Cuts: Last week Chancellor of the Exchequer Rachel Reeves (pictured) warned that tough decisions were needed to plug a £22bn budget black hole.
He said his administration’s position would be made clear in the October 30 budget.
“Of course, we need to generate revenue to fund vital public services, but we also need to grow the economy and I will not do anything to make it harder to achieve that economic growth and prosperity,” Reeves added.
Capital gains is a tax on profits made from the sale of an asset that has increased in value.
High-income earners pay a 24 percent tax on gains from residential property or 20 percent on gains from other assets. The rate could be raised to match the income tax, i.e. a rate of 40 percent or 45 percent.
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