Does Labour have secret plans to raise capital gains tax?
June 21, 2024 (Investorideas.com Newswire) Labour could have stealth plans to raise Capital Gains Tax (CGT), warns the CEO of one of the world's largest independent financial advisory and asset management organizations.
The warning from deVere Group's Nigel Green comes as Labour soar ahead in the polls, positioning Sir Keir Starmer's party for a landslide victory, meaning analysts are ramping up scrutiny on how it is to fund its ambitious public service improvements.
The deVere Group chief executive says: "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 requiring 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."
Investors need to be acutely aware of the impact this could have on their financial plans.
"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."
deVere Group strongly advises clients to consult with their financial advisors to explore tax-efficient options and portfolio adjustments.
Nigel Green emphasizes that experts will be able to provide crucial advice during these turbulent times. "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 realizing gains under the current CGT rates before any changes are implemented."
With an expected landslide victory - even Rishi Sunak is on track to become the first sitting prime minister to lose their seat at a general election - Labour would have the mandate to pursue these strategies vigorously.
The significant financial burden 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.
Nigel Green concludes: "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."
e: george@priorconsultancy.co.uk
t: +44 207 1220 925
Twitter: @PriorConsults
deVere Group is one of the world's largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of offices around the world, over 80,000 clients and $12bn under advisement.
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