UK Prime Minister Sir Keir Starmer has indicated that individuals who earn income from assets, including shares and property, could see tax hikes under Labour’s upcoming budget proposal, as these earnings fall outside his definition of “working people.”
This distinction signals a potential policy shift targeting asset-based income rather than wages. Ministers are expected to announce significant adjustments in inheritance tax and capital gains tax (CGT), potentially raising the CGT rate, which currently maxes out at 20% on shares and other non-property assets.
Starmer clarified that Labour’s pledge to avoid tax increases for “working people” applies primarily to those whose income relies on employment, not those generating substantial revenue from investments.
The policy aims to ease the tax burden on employed earners while ensuring fair contributions from higher-income earners with significant assets.
CGT on property sales will likely remain unchanged to prevent market disruptions, with inheritance tax adjustments also under review.
This approach highlights Labour’s commitment to balancing tax revenue generation with preserving support for working families, aligning with fiscal responsibility goals.
Treasury Minister James Murray affirmed that Labour’s policy will stay aligned with the manifesto’s promise, protecting wage-based incomes from tax increases.
