Starmer Resigns; The Tax Landscape May Be About to Change Again

A New PM Means a New Chancellor With New Tax Priorities

What Business Owners and Their Advisers Should Be Considering

The resignation of Sir Keir Starmer has created immediate political uncertainty. For business owners and their advisers, however, the bigger question may be what happens next.

A new Prime Minister is expected to be appointed in the coming months, and with a new leader often comes a new Chancellor, different priorities and potentially a new approach to taxation. Whilst major tax announcements have traditionally been reserved for the Autumn Budget, political transitions can sometimes accelerate policy development, particularly where governments seek to establish a clear fiscal direction.

At this stage, nobody knows exactly what a new administration's tax agenda will look like — and that uncertainty itself is causing many business owners to review their position.

Why Tax Policy Is Back in the Spotlight

Whoever succeeds Sir Keir Starmer will inherit a challenging economic backdrop. Public finances remain under pressure, borrowing costs remain elevated and demand for investment across public services and infrastructure remains significant.

Against that backdrop, commentators, economists and tax professionals have already begun speculating about where a new administration may look for additional revenue.

Importantly, none of the proposals currently being discussed represent announced government policy or confirmed future legislation. Nevertheless, they provide a useful insight into the areas that may attract political attention in the months ahead.

Potential Tax Reforms Already Under Speculation

Whilst no formal tax proposals have been announced following Sir Keir Starmer's resignation, discussion around potential future reforms has already begun.

Among the areas attracting the most attention is the future of Capital Gains Tax (CGT). A number of commentators have suggested that a future Chancellor could revisit the long-standing distinction between the taxation of income and capital gains.

Leadership contender Wes Streeting recently proposed what he described as a "wealth tax that works", arguing that:

"A pound made from simply owning assets should not be taxed less than a pound made from a hard day's work."

As part of those proposals, Streeting suggested aligning Capital Gains Tax rates more closely with income tax rates, a measure that some estimates suggest could raise £12–14 billion annually.

Similarly, a recent briefing from Paul Hastings noted that influential Labour policy groups have also proposed bringing CGT closer to income tax rates, whilst retaining targeted reliefs designed to protect genuine entrepreneurial risk-taking and business investment.

Beyond CGT, broader speculation has focused on potential wealth-based reforms. Commentators have discussed the possibility of higher taxation on accumulated wealth, investment gains and inherited assets, particularly as governments continue to search for additional revenue sources.

There has also been renewed discussion around whether the additional rate of income tax could eventually return to 50%, particularly if a future administration seeks to raise revenue from higher earners. Whilst no such proposal has been formally announced, the fact that the idea is once again being discussed demonstrates how quickly the tax landscape can evolve during periods of political transition.

Importantly, these remain rumours and speculation rather than government policy.

However, recent experience has shown that significant tax reforms can move from discussion to legislation surprisingly quickly. Few business owners predicted the scale of recent changes to Business Property Relief, Employee Ownership Trusts or the planned inheritance tax treatment of pension funds, yet all have become reality within a relatively short period. 

Could Capital Gains Tax Be Back in Focus?

Of all the taxes currently being discussed, Capital Gains Tax appears to be attracting the greatest attention.

Following recent increases to CGT rates and changes to Business Asset Disposal Relief (BADR), many advisers are questioning whether further reforms could follow. Some commentators have suggested that a future Chancellor may revisit the long-standing distinction between the taxation of income and capital gains, potentially moving CGT rates closer to income tax rates.

For business owners, this is particularly relevant. Whether planning a future business sale, transferring ownership to family members or simply managing long-term investments, CGT often plays a significant role in decision-making.

To be clear, there is currently no announced proposal to align CGT with income tax rates.

However, the fact that such discussions have returned so quickly following the Prime Minister's resignation highlights how rapidly tax policy can move from speculation to political debate.

Reliefs and rates that exist today may not remain unchanged indefinitely.

The Real Issue Is Uncertainty

The challenge for business owners is not necessarily any single tax proposal.

It is the uncertainty surrounding what may happen next.

Nobody can say with certainty what a new Prime Minister or Chancellor will prioritise. Equally, nobody can predict which of today's rumours and discussions will ultimately become tomorrow's legislation.

What is clear is that tax policy is likely to remain an active area of debate.

Whether any of the measures currently being discussed ultimately materialise is impossible to know. However, the fact that discussions around higher CGT rates, increased wealth taxation and further restrictions to reliefs have returned so quickly following recent political developments illustrates just how rapidly the tax landscape can change.

For many business owners, the greater risk may not be future tax changes themselves but failing to review existing arrangements until after those changes have been announced.

As a result, many business owners are taking the opportunity to review shareholder structures, succession plans, trust arrangements, inheritance tax exposure and future exit strategies before any further changes are announced.

A Sensible Time To Review – How Qubic Can Help

Political change does not automatically mean tax change. However, it can create the conditions for future reform.

For business owners and advisers, periods of uncertainty can provide a valuable opportunity to review existing arrangements and ensure they remain aligned with both current legislation and long-term objectives.

Qubic works alongside business owners and their professional advisers to implement commercially focused tax, succession and wealth planning strategies designed to provide long-term certainty in an evolving legislative environment.

Our team provides specialist support in business succession planning, inheritance tax planning, trust and family wealth structuring, business sale and exit planning, Capital Gains Tax planning and long-term wealth preservation strategies.

For many business owners, now may be the ideal time to review existing arrangements before any future changes are announced.

If you would like to discuss how future tax changes could affect your business, family or clients, we would be pleased to provide an initial view.

Protect your wealth. Preserve your legacy. Plan with confidence. 
Speak to Qubic today.

For more information on our tax planning services and to discuss your options with one of our team, simply click the link below: Get in touch: If you're ready, let's talk!

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