Chancellor Rachel Reeves announced an immediate increase in capital gains tax (CGT) rates, aligning CGT rates for shares with those for second homes at 18% for basic taxpayers and 24% for higher earners. This move is part of broader budget adjustments aimed at addressing a £40 billion spending gap. Despite the tax hike, Reeves pledged to unfreeze income tax and National Insurance thresholds in 2028 to relieve fiscal drag on workers' salaries. Critics argue that increasing CGT could hinder the competitiveness of the UK startup ecosystem, potentially discouraging investment in scaling businesses. The decision is seen as a measure to offset tax burdens and stimulate economic growth, although the tax burden is projected to reach historic highs.