Illustration photo. (Source: Reuters)

Some wealthy people in Britain are selling assets such as shares and property in preparation for the possibility that Labour will raise capital gains tax (CGT) if it comes to power.

According to a VNA correspondent in London, financial planners representing wealthy people in Britain said some clients, from company executives to business entrepreneurs, have sold off investments.

Labour’s finance minister Rachel Reeves said the party had no plans to increase CGT, but she refused to rule out raising the tax for the entire term if Labour came to power.

Some wealth managers said they had been contacted by “a lot of clients” asking about the potential increase in CGT. For higher-rate or additional-rate taxpayers, capital gains tax is levied at 20% on profits from the sale of assets, although assets are taxed at up to 24%.

Toby Tallon, a partner at wealth management firm Evelyn Partners, said some of his clients were selling quickly, especially those who needed cash quickly, while others were “waiting for the election results” on July 4.

He added that clients selling stocks are “people who have planned to sell something in the short to medium term and it is just a matter of when.”

Nick Ritchie, senior director at RBC Wealth Management, said a small number of clients had sold assets to ensure their gains were taxed “at a favourable 20% rate”, while others were waiting to see how they would fare. Mr Ritchie warned that some wealthy people were considering moving abroad if CGT were to rise significantly.

While Labour has pledged not to raise taxes on workers, such as national insurance, income tax or VAT, it has left the door open to changes to other taxes, including CGT. The Conservatives said in their election manifesto that they would not raise CGT.

Other asset managers have warned of the impact of the CGT increase on the UK economy. Andrew Shepherd, CEO of asset manager Brooks Macdonald, said it “has the potential to deter investment into the UK at a critical time for the economy.”

“We always see an increase in customer calls during general elections, as people seek advice on how new policies might impact their financial planning,” he added.

A wave of panic has gripped Britain’s wealthy as rumors swirl that the Labour Party will raise capital gains tax if it wins the next general election. The fear of losing substantial portions of their wealth has triggered a flurry of asset sales, with the country’s elite rushing to offload investments before the potential tax hike takes effect.

Financial advisors report a significant uptick in consultations from high-net-worth individuals seeking to liquidate assets, including property, stocks, and other investments. The concern is that Labour’s proposed changes could see capital gains tax rates rise sharply, reducing profits on the sale of these assets. Many fear that waiting too long could result in heavy financial losses if Labour comes to power and enacts the tax reforms.

Real estate markets in affluent areas have seen an unusual surge in listings, while stock market activity reflects increased selling pressure. The move has not only created a sense of urgency among the wealthy but has also sparked debates about the fairness and impact of such tax policies on the broader economy.

As the political landscape continues to shift, Britain’s wealthy are taking drastic steps to protect their fortunes, highlighting the deep uncertainty surrounding Labour’s economic plans