Prime Minister prepares public for “painful” Budget

Prime Minister Keir Starmer has warned this October’s Budget will be “painful.”

Speaking as MPs return to Parliament next Monday, he warned that there were “tough decisions” ahead, blaming the previous Tory Government for “14 years of rot.”

The Labour Party manifesto promised not to increase national insurance, income tax and VAT but there are rumours that other taxes could be hiked, such as capital gains tax (CGT), which may hit second home owners.

Ian Cook, chartered financial planner at Quilter Cheviot, said: “One of the most talked-about potential changes is an increase in CGT.

“If you hold assets that have appreciated significantly, such as property or investments, it may be worth considering the timing of any sales. While it's important not to make rash decisions, understanding how CGT works and anticipating possible changes can help you plan more effectively.
 

“For instance, if CGT rates are expected to rise, it might make sense to realise some gains now, before the changes come into effect. However, this decision should be made carefully, weighing the current market conditions and your long-term financial goals. If you’re unsure, consulting with a financial adviser can provide clarity on the best course of action as you should not damage your financial position simply to mitigate against tax changes.”

It is unclear if property taxes will be tinkered with, although the Labour election manifesto did pledge to increase Stamp Duty for non-residents.
His words may dash any hopes for Stamp Duty reform.

Starmer did at least acknowledge in his speech that Labour wants “take on the blockers by accelerating planning to build homes and boost growth.”