Capital Gains Tax changes - a special report

Changes to capital gains tax rules have remained in the news since the
chancellor announced changes in the pre-Budget report back in late 2007.

What is the Treasury’s position, and how does business feel about the
proposals? Will there be compromise or is the honeymoon over between Labour and
UK plc?

Read the stories below to see how the drama is unfolding:

2008

Brown claims Labour has cut CGT
Prime Minister says rate has come down while Labour has been in power

Darling defends CGT delays
Chancellor will take time on CGT concessions ‘to get it right’

2007

Trade minister first to break ranks over
CGT
Lord Jones, the trade minister, warns of ‘unintended consequences’ unless
Darling offers CGT concessions

Government airs CGT concessions
The Government has floated the possibility of locking in the current 10% CGT on
sale of firms until 2009

Business anger mounts as chancellor
delays
Business frustration is mounting over chancellor’s delay in unveiling CGT
changes

Darling postpones CGT reforms until New Year
Chancellor delays making final proposals on capital gains tax until 2008

Grant Thornton: concessions on CGT
unlikely
Grant Thornton says UK govt will exceed its borrowing target by ?6bn, making any
concessions on CGT reform unlikely

Business ‘more angry than ever before’ over
CGT
CBI chief warns the government that business is still fuming over CGT changes
and red tape

Insider Business Club: capital gains tax
changes
Our experts discuss the impact of the government’s unexpected CGT changes on the
business community

IoD: Govt should copy USA’s 15% flat rate
CGT
Alistair Darling should look to the US to set the new CGT rate, the Institute of
Directors has suggested

CGT triggers 60% Miller sell-off plan

Treasury’s newly foreshadowed changes to the CGT are understood to be the
trigger for a 60% sell off in Miller group

Lukewarm response to Darling’s CGT
backflip
Darling’s possible backflip on proposed CGT changes by way of a ?100,000 tax
relief softener has received a lukewarm response

Brown, Darling cave in over CGT
proposal
Brown and Darling are said to be close to bowing to business pressure to rethink
proposed CGT changes, considering a ?100,000 tax relief scheme

Business lobby fails to sway chancellor on
CGT
British employee lobby is optimistic after meeting with chancellor Darling
yesterday but failed to get a u-turn on capital gains tax policy

Darling says CGT changes will ease
accountants’ workload
Chancellor tells MPs in House of Commons that changes will simplify process and
lead to less work for accountants

Darling agrees to capital gains tax
talks
Chancellor to hold crunch meeting with envoys from the Institute of Directors,
CBI, The British Chambers of Commerce and the Federation of Small Businesses

Darling rebuffs business call for CGT
rethink
Chancellor is unmoved by mounting demand for rethink on CGT changes, insisting
they are ‘the right thing to do’

Bipartisan stance against disliked CGT
proposal
The Conservatives have allied themselves with some Labour MPs in an effort to
reverse Alistair Darling’s decision to raise capital gains tax

PBR 07: Mazars warns of unintended
consequences
The chancellor’s CGT changes are just tax rises by another name, advisers from
MacIntyre Hudson have said.

Employer groups join forces over CGT

UK’s four main business groups have joined forces in an open letter to the
chancellor, urging him to suspend proposals to abolish capital gains tax taper
relief

CBI delivers stinging attack on Darling over CGT
CBI calls CGT changes a ‘blunt instrument’ that could hit small business and the
economy in general

Employee share schemes in CGT rate hike

1.7m face new flat rate set to be more than three times that currently paid by
basic rate taxpayers

Advisers to suffer from CGT changes

Advisers will have to get their skates on to manage their clients’ tax affairs
in the wake of the impending changes to CGT

Darling considers private equity
reforms
Chancellor mulls increasing capital gains tax rates and lengthening taper relief
period

Private equity player admits taxes too
low
A report in the Daily Telegraph quoted Taylor ‘speaking independently’ as saying
tax rates could be higher without unduly harming investment

Raise revenue from CGT, says IoD
Business group suggests rethink of capital taxes

Avoidance schemes are rife among capital
gains taxpayers
The use of capital gains tax avoidance schemes is surprisingly widespread,
according to a new survey by HM Revenue & Customs

2006

Wealthy face capital gains crackdown

General anti-avoidance rule on the use of bogus capital losses to reduce capital
gains tax bills is used to hit wealthy individuals as well as companies

2005

Shell finally resolves CGT saga
Company agrees to give loan notes to small investors to avoid capital gains
liaibility that arose through its restructuring

2004

CGT rise predicted in PBR 2004
Businesses could face an increase in the capital gains tax rate when the
chancellor reveals his pre-Budget report next week.

2002

Changes to capital gains tax planned

The government has unveiled a consultation document aimed at introducing
substantial reforms to corporate tax legislation in three areas, including the
tax treatment of capital gains.

2001

PBR 2001: chancellor cuts CGT taper
relief
As expected the chancellor has announced that capital gains tax taper relief
will be reduced to 20% after one year on the disposal of business assets, cut
further to 10% after two years.

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.

Proposals on CGT fail to impress tax
experts
Inland Revenue officials are expected to come under fire at a special meeting
with tax experts on Monday following the publication of capital gains tax
proposals.

2000

Guidance note released on capital gains tax
taper relief
The Inland Revenue this week provided some additional information on taper
relief for capital gains tax.

Government urged to freeze capital gains
tax
Chancellor Gordon Brown is being urged to freeze Capital Gains Tax to allow
successive annual changes to settle down.

Lowest-ever CGT rates to boost hi-tech
companies
Small FTSE-350 companies may drop to AIM after Budget reform.

1999

Taxation – Capital gains clampdown
The Inland Revenue’s special compliance unit has ordered local tax offices to
clamp down on several capital gains tax relief schemes

1998

CGT proposal backlash
CIoT and English ICA attack government over its corporate tax consultation.

Budget 98 – Capital gains changes look long
term
New capital gains tax rules are simpler and will reduce avoidance, but according
to tax experts not all entrepreneurs will benefit.