Insurers in last-ditch bid to get CGT scrapped
The British insurance industry is making a last-ditch effort to persuade the chancellor to scrap the CGT
The Association of British
Insurers (ABI) is preparing to deliver a stark warning to the Treasury that
thousands of jobs will be lost if the chancellor, Alistair Darling, refuses to
scrap his CGT reforms,
which will badly affect the £30bn-a-year insurance bonds industry.
In its proposal, the ABI will argue that failure by Darling to revoke his
pre-Budget measures will ‘threaten significant damage to savings in Britain – at
a time when almost everyone agrees that the level of savings is too low’,
The Independent newspaper reports.
ABI was alarmed that savers would be pushed into a reduced number of savings
vehicles. The cut in CGT to 18% disadvantaged top-rate taxpayers looking for
investment in products such as insurance bonds. The new plan claims a
recommendation to reduce the rate of tax paid on investment bonds to 30% for
anyone who would currently pay 40%, is a ‘sensible compromise’.
Lobbying against the changes began days after the rushed revisions to CGT
were unveiled. Leading insurance figures are reportedly alarmed at the continued
stubbornness of the Treasury as one senior ABI figure points to its ‘fundamental
lack of understanding’.
Further reading:
Bonds hit by CGT changes
Darling rebuffs business call for CGT rethink