Labour’s first Budget will be ‘painful’ warned the Prime Minister, as he seemed to lay the ground for upcoming tax rises.

Keir Starmer said he would have to make “big asks” of the public given that the UK has a £22bn black hole in its public finances, in a speech in the Downing Street rose garden.

He reiterated that there will be no increases to income tax, VAT or National Insurance when Chancellor Rachel Reeves sets out her fiscal statement on 30 October

However, the Prime Minister did not rule out rises to capital gains, inheritance tax, and other levies surrounding pensions, as has been speculated since Labour swept to power in July.

Capital gains tax was paid by 369,000 people in the 2022-23 tax year, according to official figures, who had made £80.6bn worth of gains between them.

The levy raised £14.4bn last year, 15% lower than in the previous tax year, mainly due to lower property prices.

Capital gains tax, in part, depends on your income tax rate. If your gain and your annual income falls within the basic rate tax allowance (£12,571 to £50,270 a year) you will pay 10% on profits, unless they are from selling a residential property, in which case you will pay 18%.

Higher or additional rate taxpayers pay 24% on gains from residential property or 20% on gains from other assets. There’s a 28% rate linked to investment funds.

Analysts say these rates could be brought in line with income tax, so higher-rate taxpayers would pay 40% on their gains and those with the biggest incomes would pay 45%.

Accountants RSM says: “Many believe under the new Labour government that capital gains tax rate increases are a question of when, not if, as a result of a need to raise tax revenues if economic growth is not delivered quickly enough.

“Precedent suggests that any changes to capital gains tax rate rates may be quickly implemented. Investors should consider their investment strategy with this in mind.”

Inheritance tax is not liable on estates worth less than £325,000.

But after this, the standard rate above this threshold is 40%, although there are exemptions for agricultural land, businesses, some shares and pensions.

Last year this tax raised £7.5bn and affected 4.4% of estates on death in the 2021-22 tax year.

However, tax experts say that because this threshold has been frozen since 2009, while property prices have risen over that period, more people have been drawn into the tax.

Wealth management firm Evelyn Partners points out that the total sum of inheritance tax paid on gifts jumped by more than one-and-a-half times to £256m in 2020/21 from 2011/12.

Evelyn Partners head of estate planning Ian Dyall adds: “This data suggests that some pretty significant shock tax bills are being delivered to people.

“Those who receive generous gifts from older relatives need to be aware that they could be liable for a big tax charge if that relative dies within seven years of making the gift.”

AJ Bell director of personal finance Laura Suter points out: “In perhaps the most compelling indication yet of which taxes could be on the table in the October Budget, Starmer said that those with the ‘widest shoulders should bear the heaviest burden’, adding fuel to rumours around increases to capital gains tax and inheritance tax, while also doubling down on Labour’s manifesto commitment not to tinker with income tax, National Insurance or VAT.

“His comments will also reignite the rumours of a specific ‘wealth tax’ to be paid by the wealthiest in the UK.

“This could just take the form of increasing existing taxes for investors and the top earners, or it could be a new, standalone tax on those with the biggest pockets.”