CGT changes will not be simple, claims expert

Date: 23rd June 2010

Chancellor of the exchequer George Osborne announced during yesterday's (June 22nd) emergency Budget that capital gains tax (CGT) will rise to 28 per cent.

The increase was much smaller than many industry commentators had feared, with some experts bracing themselves for rises to between 40 and 50 per cent.

The Chartered Institute of Taxation (CIoT) has said the chancellor seems to have "made the best out of bad job" with the CGT changes, but warned the system will be more complex than many people believe.

John Whiting, the CIoT's tax policy director, said: "The chancellor's choice of a 28 per cent higher CGT rate is a pragmatic way of avoiding the necessity of complex tapering or indexation allowances."

He explained: "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."

Posted by Thomas Fletcher