The Chancellor said higher taxes on the wealthy will be “part of the story” in her Budget next month, renewing the focus on levies such as capital gains and inheritance tax.  

“Last year, when we announced things like the non-doms, like the [tax increase for] private equity, like the VAT on private school fees, there was so much bleating that it wasn’t going to raise the money — that people would leave, Rachel Reeves (pictured) told the Guardian  

She was speaking in Washington, where she is attending the annual meetings of the International Monetary Fund. 

Reeves added: “The OBR [Office for Budget Responsibility] will publish updated numbers on all of those things. And that scaremongering didn’t pay off, because this is a brilliant country and people want to live here. 

“And I think, when people scaremonger again this year, we should take some of that with a pinch of salt.” 

She told the newspaper that higher taxes on the wealthy “will be part of the story” of the Budget on 26 November. 

Last month, Reeves said that the UK does not “need a standalone wealth tax,” as the government looks to raise between £20bn and £30bn to restore its operating headroom.   

But her latest comments put a fresh focus on a range of property taxes that affect higher earners. 

Capital gains tax  

There is press speculation that anyone selling a property for more than £1.5m may have to pay capital gains tax on the amount that it has risen in value since they bought it. 

Hargreaves Lansdown head of personal finance Sarah Coles said: “This is purely speculation right now, and we can’t know what rate it might be charged at if it was introduced, but if it was charged at 24% for a higher rate taxpayer, and if someone’s £1,500,000 property had increased by 15% since they bought it, they’d pay 24% of £225,000.” 

Inheritance tax  

There has long been speculation about changes to inheritance tax rules. 

The latest centres around the annual gifting allowance, which currently has no limit on the size of gifts people can make that can become potentially exempt transfers. 

Hargreaves Lansdown’s Coles said: “The government is said to be considering imposing a limit. The extra tax would depend on how the limit worked.  

“If, for example, it was cut to £50,000, then someone with an estate worth £1.5m , with a total nil rate band of £1m, who might have planned to give away £500,000 during their lifetime, could only give £50,000 and their estate would end up paying 40% tax on £450,000.” 

Cash Isas  

Yesterday, it emerged that the Chancellor has dusted off plans to change how this savings product works, which were thought to have been shelved in the summer.  

The latest Treasury thinking is to lower the product’s tax-free limit by as much as half to £10,000 from £20,000 a year. 

Reeves is understood to be keen to divert some of this cash into stocks and shares Isas, to boost UK firms, and also because they are shown to provide higher customer returns over the long-term. UK consumers hold around £300bn in cash Isas. 

However, mutuals argue that many of their savers hold cash Isas in their accounts, which they use to fund home loans. Lower inflows from this product may drive up their mortgage pricing. 

Building Societies Association head of savings Andrew Gall said: “We are very concerned that the Chancellor is still considering cuts to the cash Isa limits.  

The body added: “Cash Isas are not idle money. They meet real and practical needs, helping people to build financial resilience, save for a house deposit or manage their finances in retirement.  

“They also provide the foundation for future investing and supplying essential funding for mortgages and other lending.”   

Downsizing tax  

The Treasury is understood to be looking at a tax on sales of properties over a specific amount, to replace stamp duty. 

Hargreaves Lansdown’s Coles said: “The cost would depend on how the tax worked, but if it entirely replaced stamp duty and was a percentage of the sale price, then someone downsizing from a property worth £1m to £500,000 would go from the current position, where they pay £15,000 on the purchase of the smaller property, to one where they might pay a percentage of the sales price.  

“There have been no potential tax rates suggested, but if, for example, it was 3% it would be £30,000.” 

But Santander UK head of homes David Morris welcomes reforms to stamp duty, which he said “stifles” supply and demand in the housing market. 

Morris argued that this tax “distorts the housing market by discouraging activity through raising the fundamental cost of buying a home.  

“Changing this transactional tax would open the market to more activity, while unlocking greater mobility by encouraging ‘rightsizers’ to move and freeing up some of the estimated 10 million empty bedrooms currently sitting vacant across the country.” 

National insurance on rental income  

Landlords may be hit by proposals to apply national insurance to rental income, in a move the Treasury hopes will raise £2bn.

The former head of the Institute for Fiscal Studies Paul Johnson, now Provost at The Queen’s College, called the proposal “economically damaging”. 

“You need to think very carefully about how to tax housing and how to tax rental housing, and the first myth to bust is the idea . . . that somehow landlords are under-taxed relative to owner-occupiers, which is complete nonsense,” said Johnson on the National Residential Landlords Association’s podcast, Listen Up Landlords.

He added: “If you make it more expensive to be a landlord, then there will be some combination of fewer landlords and higher rent.”