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Wealth & tax · UK-wide

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.

Status: Proposal — not law Region: UK-wide Party: Green Party (Zack Polanski) Active: 2026

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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%.

For most basic-rate taxpayers the change is small (18% → 20%). The big increases land on larger gains that spill into the higher and additional-rate bands, where 24% would become 40% or 45%. The calculator shows the difference for any gain and income.

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.
Interactive calculator

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%).

A what-if, not a forecast. Nothing here is law. Today's figure uses 2025/26 CGT rules; the proposed figure applies income-tax rates to the same gain. A simplified model for shares and similar assets; reliefs (e.g. Business Asset Disposal Relief) aren't included. Not financial advice.

Your figures

The rates

First £3,000 of gains is exempt under both systems.

CGT is modelled on 2025/26 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

Figures are illustrative and simplified; revenue estimates are contested and rules could change. General information, not financial, legal or tax advice.