Budget response: CGT changes pragmatic, says CIOT
The changes to Capital Gains Tax have made the best of a bad job, says the CIOT, but they do raise some practical concerns.
Commenting, John Whiting, Tax Policy Director, said:
“The Chancellor’s choice of a 28% higher CGT rate is a pragmatic way of avoiding the necessity of complex tapering or indexation allowances.
“However, the system will not be as simple as many people will have heard it: the basic rate taxpayer who makes a significant gain will find themselves paying the higher CGT rate on some of the gain as their combined total of income and gains exceeds the higher rate threshold.
“The immediate nature of the change does raise some practical difficulties over the use of losses and the annual exemption. It would have been better to wait for the start of the next tax year, although one can understand why immediate action was thought necessary.”
Notes to Editors
1. The Chartered Institute of Taxation (CIOT) is a charity and the leading professional body in the United Kingdom concerned solely with taxation. The CIOT’s primary purpose is to promote education and study of the administration and practice of taxation. One of the key aims is to achieve a better, more efficient, tax system for all affected by it – taxpayers, advisers and the authorities.
The CIOT’s comments and recommendations on tax issues are made solely in order to achieve its primary purpose: it is politically neutral in its work. The CIOT will seek to draw on its members’ experience in private practice, government, commerce and industry and academia to argue and explain how public policy objectives (to the extent that these are clearly stated or can be discerned) can most effectively be achieved.
The CIOT’s 15,000 members have the practising title of ‘Chartered Tax Adviser’.
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George Crozier
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The Chartered Institute of Taxation
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