The Greens' plan to align capital gains tax with income tax
Taxing profits from selling assets at the same rates as earnings — so income from wealth isn't taxed more lightly than income from work.
What's being proposed
Alongside its wealth tax, the Green Party wants to align capital gains tax (CGT) rates with income tax rates. Today, profits from selling assets such as shares or a second property are taxed at 18% (basic rate) or 24% (higher rate) — lower than the 20%, 40% and 45% charged on earnings. The Greens argue this gap means income from wealth is taxed more lightly than income from work, and that closing it could raise at least £12 billion a year. They also propose charging National Insurance on investment income.
How CGT works today
You pay CGT on the gain — the profit — when you sell an asset, not on the whole sale price. The first £3,000 of gains each year is tax-free (the "annual exempt amount"). The remaining gain is stacked on top of your income: the part falling within the basic-rate band is taxed at 18%, and the rest at 24%. The Green plan would replace those 18% / 24% rates with the income-tax rates of 20% / 40% / 45%.
The case for and against
Supporters argue
- It removes an unfairness where wealth is taxed more lightly than work.
- It could raise billions for public services without raising taxes on earnings.
- It simplifies the principle: a pound of gain is taxed like a pound of income.
Critics argue
- Higher CGT can discourage investment and asset sales, and may raise less than hoped if people simply hold assets ("lock-in").
- Gains are often not adjusted for inflation, so part of what's taxed isn't a real gain.
- It could affect entrepreneurs, landlords and small investors, not only the very wealthy.
What would a gain cost?
Enter a capital gain and your other income to compare CGT today (18% / 24%) with CGT at income-tax rates (20% / 40% / 45%).
Your figures
The rates
CGT is modelled on 2026/27 rules: a £3,000 annual exempt amount, then 18% on the slice of the gain that falls within your remaining basic-rate band and 24% above. The proposal applies income-tax rates instead (20% / 40% / 45%), using the same banding. Personal allowance £12,570; basic-rate band £37,700; additional rate from £125,140. Reliefs, losses, inflation and asset-specific rules are not modelled, and Scotland's income-tax bands differ. Not financial advice.
Sources & further reading
- Green Party — wealth and capital-gains tax proposals.
- GOV.UK — current capital gains tax rates and allowances.
- House of Commons Library — CGT recent developments.
- Institute for Fiscal Studies — Capital gains tax reform — options and trade-offs.
- House of Commons Library — Capital gains tax: recent developments.
Figures are illustrative and simplified; revenue estimates are contested and rules could change. General information, not financial, legal or tax advice.
Frequently asked questions
How would aligning capital gains tax with income tax affect me?
Enter your gain and income in the calculator above to compare today's CGT with the Green plan, which would tax gains at income-tax rates.
What would change under the Green CGT plan?
The Greens would tax capital gains at income-tax rates (20/40/45%) instead of the current 18% and 24%.
What are capital gains tax rates now?
For 2026/27, most gains are taxed at 18% within the basic-rate band and 24% above it, after a £3,000 annual exempt amount.
Is this government policy?
No — it's a Green Party proposal. The IFS has argued for aligning CGT with income tax, but no government has adopted these exact rates.