CBI submits its CGT proposal to Treasury

A day after the Institue of Directors submitted its wishlist on capital gains
tax (CGT) changes,
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

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