CBI submits its CGT proposal to Treasury

A day after the Institue of Directors submitted its wishlist on capital gains tax (CGT) changes, CBI has offered its own alternative reforms ahead of a meeting with the Treasury this afternoon, based on separate tax treatments of business assets and non-business assets and continued pre-PBR rules for CGT on business assets.

Richard Lambert, CBI director-general, also outlined a series of other alternatives which meet CBI's aims of encouraging investment in risky enterprises and the long-term holding of business assets.

These included cutting CGT on business assets to 10% after four years; a £100,000 tax free allowance on assets held longer than 10 years; delaying the introduction of the changes for business assets for five years; rebasing business asset holdings to 1998 levels to counter the removal of indexation; and a guarantee that, for a reasonable fixed period, business assets would not be taxed less favourably than at the time of investment.

‘The most straightforward decision the government could make immediately would be that, for business assets only, the pre-PBR 2007 regime would continue unchanged,’ Lambert said. ‘This would reassure both existing business asset holders and prospective investors, and stem the flow of panic selling before the April 2008 deadline.’

Further reading:

Splits in business ranks over CGT proposals

Lukewarm response to Darling’s CGT backflip