9:04 AM, 15th July 2020, About 11 months ago 16
The Chancellor, Rishi Sunak, has requested a review of Capital Gains Tax (CGT) in an open letter to the Office of Tax Simplification (OTS). This could indicate the Chancellor is considering a future increase in the CGT levy in an attempt to shore up the UK’s finances.
However, this morning in a Sky interview, Secretary of State, Matt Hancock, confirmed there are no ‘current’ proposals to increase the wealth tax that would directly affect landlords more than most. The scope of the review will also include Principle Private Residence relief, but increasing tax on the sale of a main residence would be politically less popular than for second and investment homes.
The open letter written by the Chancellor to the OTS said:
“I would like the OTS to undertake a review of Capital Gains Tax and aspects of the taxation of chargeable gains in relation to individuals and smaller businesses.
“I would like this review to identify and offer advice about opportunities to simplify the taxation of chargeable gains, to ensure the system is fit for purpose and makes the experience of those who interact with it as smooth as possible, as set out in the agreed terms of reference.
“This review should identify opportunities relating to administrative and technical issues as well as areas where the present rules can distort behaviour or do not meet their policy intent. In particular, I would be interested in any proposals from the OTS on the regime of allowances, exemptions, reliefs and the treatment of losses within CGT, and the interactions of how gains are taxed compared to other types of income.
“Thank you for your ongoing work in reviewing the tax system and striving to make it simpler, fairer and better.”
CGT is currently charged at 10% on gains basic rate taxpayers and 20% for higher and additional rate taxpayers, or 18% and 28% respectively where the gains are made on residential property.
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