The Labour Party is pondering a major rise in Capital Gains Tax (CGT) to put it on an equal footing with income tax.

This could be a major issue for landlords seeking to sell their properties in the hope of substantial capital appreciation.

Sky News report that cabinet ministers have looked at a blueprint for how Labour could cut taxes by taking on “vested interests.”

The draft paper – written by two groups, the Labour Growth Group and the Good Growth Foundation – wants a root-and-branch overhaul of economic strategy.

This could include cutting income tax and even abolishing National Insurance – but to make up any shortfall for the Treasury, there could be equalised CGT with income tax, and/or reformed council tax and/or tax on land.

Sky News says it “understands the report has been looked at by several cabinet ministers and potential leadership contenders” including advisers to Health Secretary Wes Streeting, former deputy prime minister Angela Rayner and Greater Manchester Mayor Andy Burnham.

The full report by the two groups is expected to be published just after the May local elections, in which some political analysts expect Labour to do badly.

Back in 2020, when Rishi Sunak was still Chancellor under the Tory government led by Boris Johnson, he commissioned the Office of Tax Simplification to look into the existing rates of CGT, as a way to plug a £300 billion Coronavirus black hole in the nation’s finances.

A year later there was evidence of landlords exiting the private rental sector in greater numbers as a result.

In 2021 Zoopla reported that the proportion of previously rented properties listed for sale on its website had risen. 

At that time, 7.2% of all new sales inventory across the UK were previously rented.