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Professor Philip Booth, Senior Academic Fellow at the Institute of Economic Affairs, said: “Capital gains tax is a complicated and damaging tax. Far from leading to it increasing, this review should lead to it being abolished.

“It is often said that capital gains tax should be aligned with income tax. However, capital gains tax on company shares is normally a ‘double tax’. Companies retaining profits that have already been taxed see their share price go up and investors then have to pay tax again on capital gains when they sell their shares.

“Our tax system has too many badly designed transaction taxes. Attempts to raise capital gains tax rates are likely to lead to less revenue and an inefficient allocation of capital as investors are put off selling shares, or alternatively sell shares simply to game the tax system.

“The UK has a very inefficient tax system for property. Both Council Tax and Stamp Duty are poorly designed and lead to bad economic outcomes. Adding another transaction tax to the property market would be a disaster and would grind the property market to a halt for all the wrong reasons.”