TaxCorporate TaxOxford professor backs CGT hike

Oxford professor backs CGT hike

Professor Michael Devereux says 18% capital gains tax rate should rise to income tax levels and no relief should be given when disposing of assets held long-term

One of the UK’s leading academics has backed the government’s capital gains
tax raid on shares, second homes and buy-to-let properties.

Professor Michael Devereux of Oxford University said the
proposed
tax rise on non-business assets
should not match the rate of income tax, but
also not be mitigated with taper relief.

“In particular, some argue that the rate should be tapered – that is, it
should fall the longer an asset is held,” said Professor Devereux in a briefing
note for Oxford University’s Centre for Business Taxation.

“However, these arguments are not convincing.”

Devereux said there was “no clear economic benefit” for encouraging investors
to hold assets for longer periods.

“The value of a financial asset depends on the income stream expected to be
generated by the asset,” he added.

“Existing owners have an incentive to maximize this expected income stream at
all times, and this is unaffected by the time the asset is owned.”

Further reading:

Cameron
makes CGT climbdown

Care
home residents could be caught in CGT trap

Related Articles

Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

2m Alia Shoaib, Reporter
‘Improve rather than lose’ disincorporation relief, tax body urges

Administration ‘Improve rather than lose’ disincorporation relief, tax body urges

2m Austin Clark, Reporter
How to educate your clients about tax avoidance

Corporate Tax How to educate your clients about tax avoidance

2m Clear Books | Sponsored
CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

Corporate Tax CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

3m Austin Clark, Reporter
‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

3m Emma Smith, Managing Editor
Should I incorporate my buy-to-let business?

Corporate Tax Should I incorporate my buy-to-let business?

4m Emma Rawson