Questioned by MPs in parliament yesterday, chancellor Alistair Darling said he intended to proceed with the changes to the capital gains tax although business is unhappy with the proposals. He maintained a single capital gains tax rate ‘was the right thing’ to do because it helped simplify the tax system.

The Association of British Insurers (ABI) is the latest business group to oppose the CGT changes. ABI told Financial Times it had sought an urgent meeting with officials from the Treasury and HM Revenue & Customs to discuss the implications. ‘We are looking very closely at the issue,’ ABI said.

The Prudential said: ‘It is obviously a very complex issue and it’s important to get clarity as soon as possible and make sure there is no detrimental impact on our products.’

But those who are hoping for a U-turn on the issue are in for an uphill battle as Darling stays firm. He told MPs: 'Although I accept some people are not happy about it, others have welcomed the proposal, and therefore I intend to proceed with the changes.'

Further reading:

Private equity bosses happy enough with fallout from PBR

Bipartisan stance against disliked CGT proposal