Brown denies £2bn tax loophole

Brown denies £2bn tax loophole

Chancellor Gordon Brown this week bullishly refuted claims he has created a £2bn tax loophole amid changes set to be made to the capital gains tax regime.

Speaking in the Commons Treasury Select Committee on Tuesday, the chancellor tackled challenges suggesting tax planners for wealthy individuals would encourage people to reclassify income as capital gains to slash their income tax liability.

However, Brown hit back stating current anti-avoidance measures would ensure a loophole was not created.

He added: ‘If there is evidence of any tax abuse, we will not hesitate to take further anti-avoidance measures to tackle the issue. We do not expect to lose revenues following the changes.’

Brown announced in the recent pre-Budget new tax breaks for employees and investors on gains they make from business assets such as shares in their own company.

The Treasury has costed the CGT changes at Pounds 10m rising to Pounds 40m by 2004/05. Critics suggested losses would come from individuals reclassifying income taxed at 40%, as capital gains, taxed at 10%.

Under the new rules, the CGT rate will fall to 20% after assets have been held for a year, and 10% after two years.

Links,/b>

Brown dodges taper relief anomaly

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource