Lukewarm response to Darling’s CGT backflip


Reports of a possible backflip by chancellor Alistair Darling on his proposed
changes of the capital gains tax (CGT), offering a ?100,000 tax relief softener,
have received a lukewarm response from the business sector.

‘Nobody must be under any illusion that this will resolve the issue,’ Richard
director-general, said. ‘There are many other businesses and investors who need
help as a result of these ill-thought out pre-budget changes,’

Peter Penneycard, tax partner at accountants and business advisers
said reports of a £100,000 tax relief on CGT for business was ‘a sop to those
business interests who damned his abolition of taper relief’ and would do little
to offset the damage to business start-ups created by the 18% rate set in the
pre budget report.

‘The tax simplification achieved through abolishing taper relief was welcome
but, if he truly wanted to foster the entrepreneurial spirit in the UK, the
chancellor should have extended the rules around the Enterprise Investment
Scheme, to allow owner-managers to invest in their businesses free of CGT. That
relief on investment of only up to £7m is currently only open to investors with
no involvement in the running of the business,’ he said.

Further reading:

Brown, Darling cave in over CGT proposal

Darling seen to soften stance on CGT changes

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