FT reports Healey has ruled out matching capital gains and income tax rates

Britain’s Chancellor John Healey has ruled out raising capital gains tax to the same rates as income tax, the Financial Times reported, citing sources. The budget is scheduled for October 28.

Reuters relayed the Financial Times report on October 13, citing four sources. The reported decision concerns full equalisation of the two taxes. It does not rule out other changes to capital gains tax in the forthcoming budget.

City AM reported that ministers had urged Healey to consider equalisation. Critics of the proposal warned it could deter investors, encourage people to leave Britain or delay asset sales. Those are arguments about potential effects, rather than measured outcomes of an adopted policy.

Capital gains tax is charged at 18% or 24% on most gains, while the income tax rates discussed in the proposal are 20%, 40% and 45%. The Treasury is also reportedly considering relief to encourage entrepreneurs who sell businesses to reinvest in Britain.