Experts reject CGT reform call
A trade body’s call for the government to exempt more than half of small investors from capital gains tax was rejected by tax experts last week (23-27 December).
The Association of Private Client Investment Managers and Stockbrokers, headed by Angela Knight, former economic secretary to the Treasury, urged the government to raise the level of annual profits allowed before being subject to CGT from #6,800 to #10,000.
The association said more than half of the 98,000 CGT payers had profits under #10,000. It also claimed the Treasury raised #27m in CGT from small investors, out of total revenues of #1.1bn.
The government overhauled the CGT regime in its March Budget, replacing indexation with tapered tax relief for increased-value assets.
Patrick Stevens, an Ernst & Young tax partner, said raising the annual profit threshold would simplify share ownership but argued small investors should not enjoy a special exemption.
‘If you pay income tax on share dividends and CGT, if your shares go up, why should one part be exempt? This is nonsense and the government is very unlikely to do it.’