The Office Of Tax Simplification has released its much anticipated report into Capital Gains Tax (CGT). This new report highlights ways Capital Gains Tax can distort behaviour, and sets out a framework of policy choice about the design of the tax for government.
The four main recommendations for the Government to consider are;
- Aligning CGT and income tax rates more closely
- Reintroducing indexation to account for the effect of inflation
- Reduce the number of CGT rates
- Taxing gains on shares in a person’s employer as income rather than capital gains
Although there is no requirement for the above recommendations to be actioned, it is probably fair to say that the disparity in the tax rates between capital gains and income is on borrowed time. Therefore taxpayers who are expecting or hoping to realise capital gains in the short to medium term should consider how they may be able to take advantage of current CGT rates.
If you would like to discuss your position with one of our tax experts please contact us at firstname.lastname@example.org or phone us on 0161 359 4227.