UK tax minister's new plan makes rich pay more on investment profits
British government introduces higher tax rates for investment gains while keeping entrepreneur benefits intact. Changes aim to raise billions for public services while maintaining competitive edge in Europe
Rachel Reeves announced today a re-structured investment tax system that changes how UK residents pay on their profits. The new-fangled plan raises basic rates from 10% to 18%‚ while higher-earners face a jump to 24% (up from previous 20%)
The tax minister explained that property-related gains would stay at current levels: this means keeping 18% and 24% rates intact. “We need to drive growth promote entrepreneurship and support wealth creation while raising the revenue required to fund our public services and restore our public finances‚“ Reeves said
The UK will still have the lowest capital-gains tax rate of any European G7 economy
Investment fund managers will see carried-interest rates go up to 32% from todays 28%. The system affects profits above 3‚000 pounds - but dont worry about your main home; its still tax-free when you sell it
For business owners the government keeps some good news:
- Life-time limit stays at 1M pounds for Business Asset Disposal Relief
- Rate remains 10% this year
- Goes up to 14% in spring-25
- Reaches 18% in 26/27 tax year
The Treasury expects these updates to bring in 2‚5B pounds; which adds to last years 15B collection from this type of tax. The changes aim to fix a loop-hole where self-employed people turned regular income into capital gains to pay less
