Ex-health secretary Wes Streeting
Ex-health secretary Wes Streeting has laid out his plans for a “wealth tax that works” as part of his pitch for the Labour leadership, the BBC reports.
He wants to equalise capital gains tax with income tax in moves that could raise £12bn a year, the report said.
Speaking on the BBC Political Thinking podcast, the MP who resigned as health secretary last week, said CGT should mirror the three income tax bands of 20%, 40% and 45%.
The report explained that under his proposals, a person's CGT band" would be calculated by adding up their income and profits from assets".
The leadership hopeful also wants to close "loopholes that allow people to disguise income from work as capital gains", according to the BBC.
Quilter tax and financial planning expert Rachael Griffin said: "Wes Streeting's proposal would represent a significant shift in how investment returns are treated, but how investors respond would ultimately determine whether it would raise the revenue expected.
"Equalising rates at up to 45% for additional rate taxpayers would markedly increase the cost of selling assets such as shares and second homes. At those levels, the incentive to realise gains weakens, raising the risk of a lock‑in effect where investors delay or avoid disposals altogether. It may also entrench a ‘hold until death' mindset, as investors defer sales to benefit from the capital gains uplift on death, further undermining the tax take."
She added that recent data showed "just how sensitive CGT is to both markets and policy".
"Receipts reached £22.2bn in 2025/26, up from £13.7bn the previous year and well above the previous peak of just under £17bn. Strong asset prices have played a role, but policy changes have clearly amplified this, with the annual exemption cut sharply and rates already increased in 2024.
"However, this surge looks heavily influenced by timing. Investors appear to have brought forward disposals to crystallise gains under a changing regime. Once that passes, activity may slow as higher tax rates take hold and investors adjust behaviour.
"That is the central risk with aligning CGT to income tax. Higher rates change behaviour. Investors may hold assets for longer, defer rebalancing decisions or rely more on tax wrappers. Over time, that can suppress transaction levels and make tax receipts more volatile rather than consistently higher."
Griffin added: "There are wider consequences for the economy. CGT plays an important role in recycling capital, and if higher rates discourage disposals, capital becomes more static. In the housing market this could limit supply and reduce mobility among second home owners and landlords. Across investment markets, it can leave portfolios less aligned to changing conditions.
"From a financial planning perspective, the shift would introduce greater tax friction. The hurdle to sell and reinvest becomes materially higher, increasing the risk of inertia and leaving investors more exposed to concentration risk over time"
Leadership crisis
Streeting told the podcast that when he met Keir Starmer in Downing Street the day before he quit the cabinet, he told the prime minister he would challenge him for the Labour leadership.
"As I said to the prime minister in my letter and privately, this is a government that lacks definition and also direction and vision," Streeting told the BBC. "When people don't know who you are, and what you stand for, they don't vote for you."
Streeting told the BBC he did not immediately trigger a leadership contest due to Greater Manchester Mayor Andy Burnham's by-election in Makerfield.
Streeting said: "It was clear that if we'd been plunged straight into a leadership contest by me or for that matter anyone else, I think it would have been seen as a deliberate attempt to get ahead of Andy Burnham's potential return."
Elsewhere in the interview Streeting gave his views on Brexit and Lord Mandelson's appointment as US ambassador.
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