I won't belabour the non-doms point as you concede yourself it was indefensible.
On CGT comps - all those are not straight forward. You can have Switz, NZ, and Bel. You can't have Lux (22% if hold >10%) or Netherlands (the system is mental... - they get their 30% though)
I think the bulging argument against the 19% two year decline is the first of those years you cite was before the labour govt, and before any changes?
Fair points on the CGT comparisons - you’re right that some of those systems are more complex than headline rates suggest. Luxembourg and Netherlands do have their quirks.
But on the timing point - that’s actually my exact argument. The 19% CGT decline from £16.9bn (2022-23) to £13.7bn (2024-25) happened BEFORE Labour’s October 2024 rate increases. The decline occurred under the Conservative government while rates were still at the “low” levels you criticised.
That’s precisely the problem: revenues were already falling when rates were at 10%/20%. Then Labour increased them to 18%/24% in October 2024, likely accelerating the decline further (we’ll see in the next fiscal year’s data).
So the revenue decline can’t be blamed on Labour’s rate increases - it happened before them. Which suggests either:
1. Even the “low” rates were still high enough to trigger behavioural responses, or 1. Other factors (non-dom changes announced, anticipated tax increases, international competition) were already driving capital flight
Either way, it supports the Laffer curve thesis: the tax base was shrinking before the rate increases, and those increases are unlikely to reverse the trend.
The OBR’s £7.5bn shortfall report (March 2025) specifically attributes this to behavioural factors beyond just asset prices, which is why they classified £4.5bn as structural rather than temporary.
What’s your read on why CGT revenues fell 14% in 2023-24 if rates hadn’t changed yet?
Oh you've lost connection with your Laffer Curve now! You can't have a downward trend with rates stable and claim Laffer!
However, I am sure you will rejoice with me in the November update forecasting a 50% rise next year in CGT receipts to $20 billion for 25-26. England is not quite finished!
https://obr.uk/efo/economic-and-fiscal-outlook-november-2025....
You’re absolutely right on the forestalling - and this is actually a perfect illustration of the Laffer curve in action.
Yes, the OBR forecasts £19.7bn for 2025-26, up from £13.7bn in 2024-25. But here’s why this supports rather than contradicts the thesis:
*That’s a one-time spike from forestalling, not sustainable revenue*
The £19.7bn is driven by people rushing to sell before the rate increases - bringing forward disposals they would have made over several years. The OBR explicitly models this as forestalling that then reverses:
- 15% lower disposals in 2025-26 (after the spike year) - 30% lower in 2026-27 - Then gradual recovery
So you get one bumper year, then years of depressed activity. The total revenue over 5 years is lower than if rates had stayed stable - classic Laffer dynamics.
*The £20bn downgrade you might have missed*
More tellingly, the OBR’s Spring Statement 2025 (March) found that CGT receipts over 2025/26-2029/30 would come in £20.6bn under the Autumn Budget forecasts made just months earlier. That’s a massive downgrade driven by “updated data on the composition of liabilities” - i.e., the behavioural responses were larger than modeled.
*Stable rates were already causing problems*
Your original point was “you can’t have a downward trend with rates stable and claim Laffer!” But that’s precisely the point - the decline from £16.9bn to £13.7bn happened before Labour’s rate increases, when rates were at 10%/20%.
What was driving it? Expectations. People knew changes were coming. Non-dom abolition was announced. Labour’s tax intentions were clear. International competition was intensifying. The behavioural response began before the policy was implemented.
*The real test*
The real question is what happens after the forestalling spike unwinds. OBR projects £25.5bn by 2029/30, but that’s based on equity prices rising with GDP and no further behavioural response. Given:
- 1,800 non-doms already left (50% above forecast) - Carried interest moving to income tax framework at 34% in April 2026 - £20bn revenue downgrade between Autumn and Spring forecasts - Continued international tax competition
…I’d wager the 2029/30 number ends up significantly below £25.5bn. We’ll know in 4-5 years, but the early indicators aren’t encouraging for the Treasury.
So yes - you’re right that forestalling creates a temporary spike. But temporary spikes that reverse aren’t evidence against the Laffer curve - they’re textbook examples of how tax policy distorts behavior and timing without increasing long-run sustainable revenue.
Can't quite remember what I was arguing for anymore...
Oh yes - well it is ofc too early to draw any conclusions yet, but my original point was... no point having a rate vastly lower than other industrialised nations - just leaves money on the table. Can never compete with zero in Dubai with low rates. Governments will have to address that in another way.
However I would say as someone who paid a chunk of tax upon selling a business, and I am way outside any actual knowledge here, CGT must be a real laggard. You generally can't just switch the domicile and the local tax man just shrugs their shoulders.