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....
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.
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.