Rich people sell off UK assets amid fears Labour will raise capital gains tax

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Some wealthy individuals in the UK are selling off assets such as shares and property over concerns about rising capital gains tax, according to several wealth managers.

Financial planners who represent the wealthy told the Financial Times that some of their clients, ranging from corporate CEOs to businessmen, are already selling their investments.

Opposition Chancellor Rachel Reeves said her party had no plans to raise CGT but did not rule out the possibility of raising the tax during a Labor government.

Several property managers said they had been asked by many clients about the possibility of a CGT increase. For higher or additional rate taxpayers, profits from the sale of assets are taxed at 20%, but property is taxed at up to 24%.

Toby Tallon, a partner at Evelyn Partners, a wealth management firm, said some clients are taking action now to sell assets, especially those who need cash soon, while others are waiting for the results of the July 4 election.

He added that clients who sell stocks are those who already have plans to sell something in the short or medium term, it's just a question of when to sell.

There is a general sense of anxiety, said Nick Ritchie, senior director at RBC Wealth Management. [around] Silence on CGT. He added that a small number of clients have already sold assets and are being taxed at the 20% rate, while others are taking a wait-and-see approach.

Rich warned that some wealthy people were considering moving abroad and that a significant increase in CGT would lead many to seriously consider moving abroad and becoming non-residents.

He added that the trend was worrying and that it could lead to a brain drain of people who do business in Britain, create jobs and already pay significant taxes.

Labour has pledged not to raise taxes on workers, such as national insurance, income tax or VAT, but it has left the door open to changes to other taxes, including CGT. The Conservatives have said in their manifesto that they will not raise CGT.

“Rental homeowners are actively selling,” says Ian Cook, a certified financial planner at Wealth Manager Quilter Cheviot. “The people who are most concerned are those who own multiple properties, because selling can take months.”

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Other property managers have warned of the wider economic implications of the CGT rise. Andrew Shepherd, chief executive of property manager Brooks McDonald, said it could deter investment in UK-based companies at a critical time for the economy.

He added: “We always get a lot more calls from clients around election time as people are looking for advice on how new policies will affect their financial plans.”

Labour said: Our plan does not call for any additional tax rises. We have a fully costed, fully funded plan that will close very specific tax loopholes.

We have made it clear that we are not interested in raising taxes and that our priorities are growing the economy and improving the lives of workers.

Additional reporting by Jim Pickard

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