U-Turn on Capital Gains Tax????

HAMISH_MCTAVISH

A strong hint of a U-turn on the planned rise in capital gains tax was made in the Queen's Speech today.

Fears have been brewing of the current 18 per cent rate being hiked to 40 or 50 per cent rate to bring it into line with income tax.

But a clue was given that ministers have bowed to angry warnings that middle income savers and second home owners would be unfairly penalised by such a rise.

Background notes issued with today's speech spoke of the tax being made “closer to those applied to income tax”, suggesting a rate above 18 per cent but possibly far short of the 40 per cent tax rate on higher earners.

That language was in marked contrast to last week's coalition agreement document which spoke of “rates similar or close to those applied to income”, implying 40 per cent or even a 50 per cent rate to match the new supertax for top earners.

Downing Street played down the significance of the change of language. “I would not read anything into it,” said an official spokesman, who said background briefing notes were merely truncated explanations.

“You will have to wait for the Budget to see what rate is applied.”

http://www.thisislondon.co.uk/standard/article-23838078-queens-speech-u-turn-on-capital-gains-tax.do

Very interesting.....

Given the increasing pressure form the Tory back benches, I rather suspect that CGT will be higher than now, but not as high as income tax..... Or at least not without significant loopholes.

Graham_Devon

Wouldnt make any difference anyway. All about the yield, innit.

Kohoutek

Not surprising really - 50% would be one of the highest rates of CGT in the world.

A quick look on Wikipedia shows that even in countries such as France, Sweden and Denmark their CGT rates are significantly lower at 30%.

http://en.wikipedia.org/wiki/Capital_gains_tax

chucky

Kohoutek wrote: »

Not surprising really - 50% would be one of the highest rates of CGT in the world.

A quick look on Wikipedia shows that even in countries such as France, Sweden and Denmark their CGT rates are significantly lower at 30%.

http://en.wikipedia.org/wiki/Capital_gains_tax

t'was pretty obvious it wouldn't be a priority or something that would happen - it will change but a much more diluted version.

StevieJ

I always imagined that it would be the same as marginal rate i.e 20% for BR tax payer and 40% for HR.

Degenerate

They should just bring back the old regime with marginal rate + taper relief. It was one of the most pointless and counterproductive changes Labour made.

macaque_2

"..... and second home owners would be unfairly penalised.."

The poor darlings. I am sure that young families forced to live in two bedroom flats will be relieved to hear that Tarquin and Vanessa's weekend retreat in Kent is safe from the tax man.

HAMISH_MCTAVISH

macaque wrote: »

The poor darlings. I am sure that young families forced to live in two bedroom flats will be relieved to hear that Tarquin and Vanessa's weekend retreat in Kent is safe from the tax man.

In fairness macaque, there are only 300,000 second homes in total.

And a CGT rise wouldn't cause all that many to sell.

And many of those homes are in pretty remote places...... So would be of help to a pretty limited group of people.

I can't see it making a difference, to be honest.

Mr_Mumble

CGT and IHT are both politically noisy but bring in very little income. Together they're projected to bring in £5bn this tax year (page 193 of the budget report: £2.7bn for CGT, £2.3bn for IHT). The new government is planning to spend £698bn this tax year.

CGT at income tax rates is fine by me but you need to have some form of inflation indexation or taper relief. The majority of people who'd get whacked by un-indexed CGT will be those who've kept share certificates in their draws since the 1980s. It will not be the day traders (don't pay any CGT through spreadbetting), BTLers (who could simply incorporate) or private equity partnerships (who'll either run rings around the legislation or leave for a tax haven!)

1984ReturnsForReal_2

Tories = Rich = Less Tax


Simple Maths

IveSeenTheLight

StevieJ wrote: »

I always imagined that it would be the same as marginal rate i.e 20% for BR tax payer and 40% for HR.

Works for me.
No intention to sell untill I retire.
That way I should be able to deduct the allowances and then start at the lowest rate of tax.

In theory, some could end up paying even less tax than the 18% depending on their profits