Rachel Reeves faces £23 billion capital gains tax “black hole” – will she be forced to look elsewhere?

Chancellor Rachel Reeves faces a £23 billion downgrade in capital gains tax revenues over the next five years, attributed to changes in taxation of carried interest and investor behavior shifts due to tax hikes. Despite the revision, CGT receipts are expected to nearly double by 2029/30, leading to concerns about potential future tax hikes to cover borrowing costs and spending requirements. Economists predict Reeves may need to consider measures such as tightening inheritance tax rules or freezing income tax thresholds to address the shortfall.

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