Andy Burnham has been urged to introduce a third Capital Gains Tax (CGT) band as part of a major shake-up of the tax system. The proposal comes from Better!, a new report by the Compass thinktank, led by his ally Neal Lawson. The report calls for CGT rates to be equalised with income tax rates, which would see households paying 20 per cent, 40 per cent, and 45 per cent on their gains.
Current CGT rates and the proposed changes
As it stands, Capital Gains Tax rates are 18 per cent and 24 per cent for individuals. If you are a higher or additional rate taxpayer, you pay 24 per cent on your gains. If you are a basic rate taxpayer, the rate you pay on gains from 6 April 2026 will likely be 18 per cent.
The Better! report states: "Tax wealth equally to how we tax work: equalise the CGT rates with income tax." This would mean the basic rate increases by 2 per cent, the middle rate by 16 per cent, and a third, new rate for additional rate taxpayers.
Report warns of wealth inequality and political impact
The report warns: "This grip on power, wealth and information by the few, for the few, is the operating system of British politics." It argues that this system is funding and supporting the rise of authoritarian populism across the UK. Unaddressed, it will continue to deliver increasingly astronomic levels of wealth for a super-rich elite at the expense and degradation of the rest of the country.
"If we don’t change this operating system then the same struggles will continue: paying bills, affording rent, getting a doctor's appointment, getting a decent job, building a hopeful future for our children and action against climate change," the report adds.
Coalition of campaigns backs the Better! initiative
For the first time, three existing coalitions - campaigning on media, taxes and votes - have joined forces to challenge and change the operating system within which UK politics is done. Together, they aim to create a broad, compelling, hopeful national story, enabling a wide variety of people, organisations, and communities to act under the shared banner of Better!.
