IG welcomes reported decision to rule out CGT rise, as analysis shows investors have faced 20 tax and rule changes in a decade

• Reports from last night indicate the Chancellor will not increase CGT in the Budget
• IG urges Government to leave other investment taxes alone and commit to stable regime
• 20 changes in last decade have included cuts to Dividend Allowance and CGT exemption, increases to Dividend Tax and CGT rates, and changes to ISA rules

With the Autumn Budget one week away, new analysis from IG lays bare a decade of chopping and changing to the rules governing investing in the UK. Since 2016, the Government has announced 20 changes to investment taxes and rules, from CGT and Dividend Tax to ISAs and pensions.

Reports that Chancellor John Healey has decided against raising CGT at the Budget are welcome news for investors. However, IG argues that a more consistent approach to investment policy is needed to restore confidence and encourage more people to invest for the long term.

Among the most significant changes announced over the past decade have been the reduction of the Dividend Allowance from £5,000 in 2016 to £500 today, increases to Dividend Tax rates, and the increase in the main rates of Capital Gains Tax in 2024 (See table below).

Investors have also seen seven changes announced to ISA rules and limits since 2016, including the British ISA, which was proposed as an additional £5,000 tax-free allowance for UK shares before subsequently being scrapped.

There have also been pension rules changes over the time period which have affected DIY investors using SIPPs, including the abolishment of the Lifetime Allowance in 2023, and the increase to the Annual Allowance later that year from £40,000 to £60,000.

While not every policy announcement has ended with a permanent change to the rules, IG argues that announcements alone can lead people to alter their approach, creating uncertainty and damaging confidence.

Michael Healy, CEO of IG Consumer, said: “Investing for the long term requires confidence that you understand the rules you’re investing under. But over the past decade, investors have faced repeated changes to investment taxes and rules. It’s not just changes that come into force that create uncertainty – investors also have to navigate proposals that are subsequently changed or dropped, let alone those leaked ahead of Budgets.

“Reports that the Chancellor has ruled out raising CGT are welcome and would send a much-needed positive signal to investors. The Government must now build on this by committing to a stable investment tax regime that gives more people the confidence to invest for the long term. This is also one of the best ways the Government can reduce reliance on the state and strengthen the UK’s fiscal position.”

IG recently launched its Investing Manifesto, setting out policy recommendations to make investing a more habitual part of everyday life and remove barriers that discourage people from investing. The manifesto calls on the government to maintain the current Capital Gains Tax (CGT) and Dividend Tax regimes, phase out the Cash ISA and introduce a £1,000 investment grant for every newborn child in the UK.

A decade of investment policy changes 

The analysis identifies 20 announcements relating to investment taxes and rules affecting UK retail investors since 2016. Some announcements were subsequently amended, reversed or abandoned.