CGT relief will hurt employee share owners

At least 80,000 people will be negatively affected by the government’s
changes to capital gains tax, employee share ownership experts IFS ProShare have

At the EEF Manufacturers biennial dinner last night, the chancellor said the
last minute CGT concessions he made in January, giving entrepreneurs a 10% tax
rate on the first £1m of gains, would benefit 80,000 people over the next year.

ProShare, however, says that as many people will be hurt by the reforms.

The organisation says the current CGT regime sees basic rate taxpayers who
have held shares in their employer for at least 2 years subject to a 5% CGT

The chancellor’s changes mean that these employee shareholders will have to
pay an additional 13% tax on any gain above £9,200 from April 2008.

‘It’s rather a sad irony that the number of people Alistair Darling says will
benefit from his concessions are the same number as those who could lose out,’
said IFS ProShare’s head of public affairs Phil Hall.

Further reading:

ICAS: Taxpayers denied time to deal with CGT

CGT changes threaten workers share

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