Budget Resolution No. 6: Capital gains tax (the main rates)

Wednesday, 6 November 2024 · Division No. 28 · Commons

401Ayes

–

120Noes

Passed

126 MPs did not vote

leftGovernment wonPro Capital Gains Tax Increase(Yes)Anti Tax Increase(No)Pro Progressive Taxation(Yes)Pro Investment Incentives(No)

Voting Yes means

Support increasing the main rates of Capital Gains Tax as proposed in the Labour Budget, raising rates on profits from selling assets such as shares and property

Voting No means

Oppose the Capital Gains Tax rate increases, arguing they discourage investment, entrepreneurship, or economic growth

Parliament voted on 6 November 2024 to approve Budget Resolution No. 6, raising the main rates of capital gains tax (CGT) from 10 per cent to 18 per cent for basic-rate taxpayers, and from 20 per cent to 24 per cent for higher-rate taxpayers, on most assets. The resolution passed by 401 votes to 120, a majority of 281. This vote was one of a series of budget resolutions brought forward by the Labour government following the autumn Budget statement, giving formal parliamentary approval to the tax changes announced by Chancellor Rachel Reeves.

The increase in CGT rates affects individuals and trusts who sell assets such as shares and investment property that have risen in value. In practical terms, the change raises the rate at which those gains are taxed, bringing CGT rates closer to income tax rates. The measure is intended to raise additional government revenue, contributing to the fiscal plans set out in the Budget. Those who sell qualifying assets after the change comes into effect will face a higher tax liability on any gains realised, which proponents argue makes the tax system more progressive by taxing returns on wealth at rates nearer to those applied to earnings from work.

The vote divided almost entirely along party lines. All 338 Labour MPs and 37 Labour and Co-operative MPs present voted in favour, joined by the Scottish National Party's nine MPs, all four Plaid Cymru members, all four Green MPs, and one Social Democratic and Labour Party MP. Seven independents also voted aye. All 108 Conservative MPs present voted against, as did all five Reform UK MPs, three Democratic Unionist Party MPs, and four independents. There were no notable rebels on either side. The result reflects the broader political contest over the Budget, in which the government has faced sustained Conservative opposition to its package of tax rises and spending decisions, a pattern also visible in related votes on business rates and national insurance contributions in the same parliamentary period.