Earned income taxed twice as heavily as capital gains for some in UK, study finds

Nigel Lawson set the rates of CGT at the same level as income tax in 1988 when he was chancellor. Photograph: Gerald Penny/AP

A graduate earning £35,000 a year pays almost double the average tax of someone with the same income from rent on property, according to a study of inequality in the UK tax system.

The combined effect of income tax and national insurance payments forces people in employment to pay much higher rates of tax than those who benefit from lower capital gains tax (CGT) rates on property and shares income, according to the Intergenerational Foundation thinktank.