In my view, the best way to deliver more money for our public services is through economic growth and a wealth tax might deter the investment we need to deliver that growth. Nevertheless, the Government is committed to ensuring the wealthiest in our society pay their fair share of tax, and I welcome that the tax changes announced at the Budget last year, underpinned by fairness, included the reforming of capital gains tax and inheritance tax, closing loopholes in the windfall tax on oil and gas companies, and abolishing the non-dom regime.
The Budget announced an increase in the main capital gains tax rates to 18% and 24% to raise revenue while ensuring the UK tax system remains competitive. These changes will raise £8.9 billion over the next five years and will ensure people earning income from selling financial assets will now contribute a greater share of tax towards improving our public services. The Government has also abolished the non-dom regime, replacing it with a new internationally competitive residence-based regime, which came into effect in April 2025. This ends the use of offshore trusts to shelter assets from inheritance tax and will help ensure everyone who makes their home in the UK pays their taxes here.
In addition, the Government is raising an extra £2 billion from inheritance tax, including through restrictions on reliefs used by wealthy individuals. These include making the inheritance tax system fairer by applying inheritance tax to unspent pension pots, removing the opportunity for individuals to use pensions as a vehicle for inheritance tax planning, and by restricting the generosity of agricultural property relief and business property relief for the wealthiest estates.
I also support the new higher rate of stamp duty for additional dwellings, which has increased from 3% to 5%. This ensures that those looking to move home, or purchase their first property, have a greater advantage over second home buyers, landlords and businesses purchasing residential property.
During the Spring Statement, the Chancellor announced that the Government is now building on the Budget’s package to close the tax gap with measures to further reduce tax evasion and raise over £1 billion in additional gross tax revenue per year by 2029-30. I welcome these steps, as unpaid tax deprives UK public services of vital funding and puts businesses that pay the correct tax at a competitive disadvantage. The Government also plans to go further in the future to make it easier for taxpayers to pay the right tax through a modern and digital tax system.
Thank you to those constituents who have contacted me about this issue.
Best wishes
Rt Hon Hilary Benn
MP for Leeds South
Secretary of State for Northern Ireland