UK Finance Minister Jeremy Hunt is preparing a raid to slam entrepreneurs, savers and landlords with higher taxes when he unveils his Autumn budget later this month, the Daily Telegraph reported, citing unnamed sources.
The report said Hunt was is considering an increase in the headline rate of capital gains tax, taxes on dividends and slashing or removing the £2,000 tax-free dividend allowance.
Capital gains tax is levied on profits made from selling an investment, including shares and properties that are not the main home.
CGT is expected to raise £15bn in 2022-23, or 1.5% of all receipts. Currently rates vary from 10-28% depending on the type of asset and the income of the taxpayer.
Hunt is looking at raising the dividend tax rate and a cut to the tax-free dividend allowance in a £1bn-a-year tax raid on pensioners, business owners and the self-employed, the paper said.
Under the current rules no tax is paid on dividend income under £2,000 but Hunt was said to be considering halving or even cutting it altogether.
Basic rate income taxpayers currently pay 8.75% on dividends earned above the allowance, while higher rate payers pay 33.75%.
Reporting by Frank Prenesti for Sharecast.com