From the TUC

CGT change is very modest

22 Jun 2010, by in Economics

The increase in CGT is welcome as far as it goes, but it is a very long way from the Lib Dem call for CGT rates to be equalised with income tax rates.

The 28 per cent rate means that there is still a strong incentive to use accountancy tricks to turn income into a capital gain (as we explain here).

The exemption for standard rate tax payers may have looked to MPs like a concession to the less well-off, but will more likely benefit rich families. Very few people own enough assets to give any kind of CGT liability, yet 60 per cent of CGT bills got to those who either pay no income tax or the standard rate.

This is because tax avoiders are adept at transferring assets to non-income earning spouses and dependents thus gaining as many as possible ~£10,000 CGT allowances as possible.

The Chancellor was strong on CGT before the budget, but this is weak stuff.

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