Capital Gains Tax Concession, Darling?
Alistair Darling, Chancellor of the Exchequer, has made indications that the government will make some concessions on Capital Gains Tax (CGT) reform over the next few weeks.
In early October Alistair Darling announced changes to both Corporation Tax and Capital Gains Tax, hoping to simplify the system with a 2% cut in Corporate Tax, a single 18% CGT rate and an end to taper relief. Instead, Mr Darling angered many small businesses and incurred the wrath of the CBI, with an open letter to Mr Darling expressing the potential damage to the country’s many enterprising small businesses.
In a speech to the CBI conference on Tuesday Mr Darling continued to defend his position, once again relying upon his insistence that the tax system will be simplified as a result of his actions.
He has admitted that he knew there would be controversy over his announcements however, he has also declared that he is working with the CBI and other business groups, promising to listen to the voices of British business and publish new details within 3 weeks.
The CBI has suggested alternatives to the CGT cuts, such as separating the tax treatment of business and non-business assets, although it is thought that he is likely to attempt to change the rules on retirement relief.
Richard Lambert, Director General of the CBI, has promised further outspoken words against the chancellor should Darling’s changes “fall short of expectations”.