One of the most chaotic areas of tax that the Coalition Government inherited from its predecessor is the capital gains tax regime. Under the previous rules some of the richest people in this country had been able to pay less tax than the people who clean for them. That was not fair.
In the Emergency Budget 2010, the Chancellor announced an increase in capital gains tax rate from 18 per cent to 28 per cent for higher rate and additional rate taxpayers. Basic rate taxpayers will continue to pay an 18 per cent rate on their gain. The current structure and rates of Capital Gains Tax balance the need to raise revenue with the need to maintain simplicity for taxpayers and support investment.
In addition capital gains and income from assets held in ISAs are entirely free of tax. Any changes to Capital Gains Tax would need to be considered very carefully to ensure that any benefits to taxpayers and the wider economy were significant enough to warrant the added complexity this would introduce into the tax system.
By Patrick McLoughlin on October 15, 2015