TaxPersonal TaxScrap CGT on old assets, says IoD

Scrap CGT on old assets, says IoD

The Institute of Directors has called on the government to scrap all taxation calculations on assets, which a company has owned for five years or more.

This would mean that such assets would be completely ignored for tax purposes. Details of the proposal were published in the IoD’s latest quarterly bulletin, Tax News.

The IoD’s proposal would mean a ‘fundamental break with the past’ and its system of taper relief, introduced in April 1998. Under taper relief, a 10% effective tax rate could be achieved after ten years of ownership compared to 24% on non-business assets held for the same period.

But, the IoD said it was time the government adopted a ‘radical’ approach to capital gains tax.

Richard Baron, deputy head of the Policy Unit at the IoD, criticised the over-complex capital gains tax laws.

‘Intelligent and financially aware people struggle with the calculations needed to compute the gains on simple transactions in modest share portfolios.’

He added: ‘Now is the time for the government to take radical action to remedy this unacceptable situation.’

Another IoD proposal for CGT simplification would be to replace the current exemption for the first £7,500 of gains with an exemption based on total sale proceeds.

Links

Employees get capital gains boost

IoD?s Tax News August 2001

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