Capital Gains Tax warning over fears Labour has stealth plan to hike levy | Personal Finance | Finance

Labour could have stealth plans to raise Capital Gains Tax (CGT), warns the CEO of DeVere Group. 

The warning comes as Labour soars ahead in the polls, leaving analysts ramping up scrutiny on how it is to fund its ambitious public service improvements.

Nigel Green said: “Labour is expected to secure a substantial majority, giving the party enormous political leverage to implement its policies agenda with minimal resistance.

“This situation positions CGT as low-hanging fruit, a quick and effective means to generate the revenue needed to help pay for Labour’s extensive manifesto commitments.

“Labour has promised that it would not increase income tax, national insurance and VAT – three major taxes – but also outlines critical plans to address issues such as homelessness, higher education funding, adult social care, and local government finances. These all require substantial funding.

“The money has got to come from somewhere – and we expect that an increase in CGT will be a prime target to help plug the gap.”

Mr Green urged investors to remain acutely aware of the impact this could have on their financial plans.

He continued: “The introduction of higher CGT rates could occur shortly after Labour takes office, possibly during an Autumn Statement.

“Many investors will be reviewing their portfolios immediately and considering tax-efficient strategies to mitigate impacts on their wealth.”

Investors are urged to consult their financial advisors to explore tax-efficient options and portfolio adjustments.

Mr Green said: “Safeguarding your investments against potential tax hikes is essential. Don’t wait until it’s too late—proactive planning is key.

“This includes considering tax-efficient investment vehicles, rebalancing portfolios, and potentially realising gains under the current CGT rates before any changes are implemented.”

With an expected landslide victory, Mr Green said Labour would have the mandate to pursue these strategies “vigorously”, adding that the “significant financial burden”n of their pledges makes CGT an attractive target for generating necessary revenue.

The speculation around a CGT increase is intensifying as public finances remain severely constrained.

Mr Green said: “We believe that the combination of Labour’s anticipated electoral success and the need to fund their extensive policy proposals makes a CGT increase a real possibility.

“Preparing for this scenario now can help mitigate potential negative impacts on your financial future.”