Capital gains tax has emerged as the option UK insiders reportedly regard as most likely for a rise in Chancellor John Healey’s 28 October 2026 Budget, the i Paper reported this week, citing unnamed “Labour insiders” — a claim carried here only as reported, single-source speculation, not a confirmed government position. Two days earlier, a coalition of NGOs delivered a 150,000-signature petition to Prime Minister Andy Burnham’s Manchester-based government office calling for a tax on “extreme wealth,” and the campaigners’ own proposal does not treat capital gains tax and a wealth tax as competing options — it bundles a capital-gains overhaul together with a new 2% wealth tax as parts of one funding package. Nothing here has been decided; the Budget itself is still six weeks away as of this reporting.
The fiscal backdrop makes clear why any tax rise is even plausible right now. Economists cited by The Times, and reported by the Independent on 16 September 2026, say the government’s fiscal headroom — around £23 billion as of the last assessment — has fallen to roughly £5 billion, with the Resolution Foundation putting the range at £5–10 billion. Government borrowing costs hit a 19-year high in the past week, which the Independent attributes to the war in the Middle East and its effect on oil prices; UK inflation rose to 3.1% in August, a five-month high. Resolution Foundation chief executive Ruth Curtice said the situation leaves “borrowing… higher in the forecast by a significant amount” against volatile bond markets, while Capital Economics group chief economist Neil Shearing said Healey “faces little choice but to weigh up tax rises or spending cuts to make up the shortfall.” Against that backdrop, a report singling out capital gains tax as the specific frontrunner — rather than one of several options, as it was framed in Reuters’ early-September reporting — is a narrowing of speculation, not a widening of it, even though it remains unconfirmed and single-sourced.
Away from insider reporting, organised public pressure is moving in a related but distinct direction. On 15 September 2026, Tax Justice UK, Patriotic Millionaires UK, 38 Degrees and Oxfam GB jointly delivered a petition with over 150,000 signatures to “No10 North” — described by the organisers as the first such petition hand-in at the Manchester site now serving as a government operations hub — calling on Burnham to tax the “extreme wealth” of the super-rich. The centrepiece proposal is a 2% annual tax on net assets over £10 million, which the coalition estimates would raise upwards of £24 billion a year from around 22,000 people. But that is only one plank of a wider package the campaigners say would raise roughly £50 billion a year combined: it also explicitly calls for “completing reform of Capital Gains Tax” — equalising CGT rates with income-tax rates, abolishing the CGT “death uplift,” and adding a new investment allowance — which the organisers project would raise £11.3 billion a year, plus extending National Insurance Contributions to investment and partnership income (£6.1bn), a public country-by-country reporting requirement for multinationals (£5bn), and replacing council tax and stamp duty with a “proportional property tax” (£5.6bn). Tax Justice UK executive director Faiza Shaheen said Burnham “has a big responsibility to deliver the reset he’s promised Britain,” while Oxfam GB’s Jean McLean said a 2% levy on assets over £10 million “would raise £24 billion a year to ease pressure on over-stretched public services.” All of these figures are the campaigners’ own projections, not independently modelled or government-confirmed. A Survation poll commissioned by 38 Degrees (fieldwork 18–19 August 2026, 2,037 UK adults) found 64% think the super-rich should pay more tax and 51% feel the tax system treats them less fairly than it treats the wealthiest.
Put together, the two threads say something neither says alone: the “which one tax will rise” framing understates what is actually in motion. Insider reporting increasingly narrows in on capital gains tax specifically, while an organised, well-resourced lobbying campaign — with direct access to the Prime Minister’s own operational base — is pushing a package that treats CGT reform and a new wealth tax as complementary, not alternative, revenue sources, with a property-tax replacement for council tax and stamp duty attached to the same package. None of this has been adopted. But the range of tax categories genuinely being discussed ahead of 28 October has widened over the past ten days, not narrowed to a single option.
Zagdim’s View — For anyone holding UK property or other UK-based assets from overseas, the relevant fact right now is not that any of these specific taxes will change — nothing has been decided, and the Budget is still six weeks off. It is that the reported “frontrunner” status of capital gains tax, and the wealth-tax campaign’s own bundling of CGT reform with a proportional property tax proposal, both point toward the same broad territory: gains and asset value, categories that inherently include property and investment holdings, rather than income or consumption taxes that Burnham has already ruled out touching. The useful discipline between now and 28 October is tracking what the Budget actually contains, not reacting to any single pre-Budget report or campaign proposal as if it were settled policy.
References
The i Paper – Capital gains tax frontrunner for hike in Budget / Law360 Tax Authority – NGOs Petition Burnham For Wealth Tax Ahead Of Budget / Tax Justice UK – Press release: Petition Hand in at Number 10 North / The Independent – Andy Burnham will need to raise taxes or cut spending in Budget, economists warn
