Rayner refuses to rule out applying capital gains tax to family home sales

Angela Rayner speaks on Thursday's seven-way ITV election debate
During the debate, Angela Rayner said: 'We do not need to raise taxes on working people because our manifesto is fully costed' - Jonathan Hordle/ITV/via Getty Images Europe

Angela Rayner has refused to rule out applying capital gains tax (CGT) to the sale of family homes.

The Labour deputy leader was challenged by Penny Mordaunt, the Commons leader, who said the failure of Labour to rule out an increase in CGT would mean “higher costs for families when they’re selling their homes.” She added: “Will you commit to ruling that out now? “

Responding on Thursday’s seven-way ITV election debate, Ms Rayner replied: “Rachel [Reeves, the shadow chancellor] has set out, yes, we have set out that we will not raise income tax, National Insurance and VAT.

“And we do not need to raise taxes on working people because our manifesto is fully costed, unlike the Conservatives.”

Ms Mourdant said: “So you are not going to raise capital gains tax?”

Ms Rayner replied: “There is nothing in our manifesto that means we have to raise capital gains tax, no.”

The Tories seized on the exchange as evidence that Labour’s plans on CGT would go further than simply raising the tax on second homes and extend it to primary family residences.

A party spokesman said that Labour had previously refused to match Conservatives’ family home tax guarantee, which committed not to scrap the private residence relief for CGT that ensures the tax does not currently apply to the sale of people’s main home.

Penny Mordaunt, the Commons leader, speaks during Thursday's seven-way ITV debate
Penny Mordaunt, the Commons leader, went head to head again with Ms Rayner during Thursday's debate - Jonathan Hordle/ITV/via Getty Images

“We will maintain private residence relief so that people’s homes are protected from capital gains tax,” said a spokesman.

A Labour spokesman said that the party had already set out its tax plans and added: “Nothing in our plans requires any additional tax to be increased and there will be no return to austerity if Labour are elected on July 4.”

Successive Labour frontbenchers have refused to rule out raising CGT rates. Increasing the tax in line with income would mean a jump from a higher rate of 24 per cent to 40 or even 45 per cent, raising an estimated £8 billion.

However, sources close to Ms Reeves have denied that the party would impose CGT on family homes.

Speaking in response to Labour’s manifesto on Friday, Laura Trott, the chief secretary to the Treasury, said: “The idea that Labour are secretly planning to put capital gains tax on your primary residence for the first time is a disastrous policy for families up and down the country.

“It is something that the Labour Party should not do in secret. They must be honest about their plans and the impact that this would have on family homes up and down the country.”