Chancellor Rachel Reeves refuses to rule out inheritance and capital gains tax rises

The chancellor did not say no to the possibility of increasing inheritance and capital gains taxes after Sir Keir Starmer cautioned that the upcoming autumn budget could bring some difficult decisions.

On Wednesday, Rachel Reeves avoided giving a direct answer three times when asked if it was possible to definitively say they wouldn't increase the two taxes during the budget in October.

Yesterday, Sir Keir Starmer suggested that the upcoming October budget will involve some difficult decisions, hinting that taxes may be increased.

Stay tuned for real-time updates on political events.

During the election and after, the Labour party insisted that they would not raise income tax, national insurance, or VAT. However, they were reluctant to clarify if other taxes would be increased.

Estate tax, which is levied on the assets left behind by a deceased individual, and capital gains tax, which is applied to the earnings from selling investments or other assets, are expected to increase.

On Wednesday, when questioned about possibly raising taxes, Ms. Reeves replied, "I won't be detailing the budget until closer to its delivery date."

"We will need to make tough choices in various areas."

When asked once more if she could confirm that there would be no increases, she replied: "We will need to make some tough choices on spending, welfare, and taxes, but I will provide all the necessary details in a clear and appropriate manner during the budget announcement on October 30th."

After being asked a third time to confirm that there would be no tax increases, she responded: "I will announce the budget on 30 October."

Make sure to use Chrome browser to have a better experience while watching the video player.

Explore further: What tax increases might the Labour party implement?

Lots of people in the City are worried about the government's plan to increase the capital gains tax rate from 28% to match the 45% higher rate of income tax.

According to a study by the Institute for Fiscal Studies (IFS), making the two equal could potentially generate £16.7bn.

However, according to HMRC's assessment and numerous economists, raising capital gains tax may lead to a decrease in revenue as individuals may choose to hold onto their assets for a longer period before selling them.

At the moment, inheritance tax is charged at a rate of 40% on estates valued above £325,000. However, there are exceptions in place which result in only 5% of deceased individuals being subject to this tax, and those who are taxed usually pay a lower rate.

The IFS stated that the government has the potential to generate an additional £4 billion by eliminating gaps in inheritance tax regulations.