Overhaul of Capital Gains and Inheritance Tax on the cards?

Posted on November 10th, 2011 | Categories - News

Capital Gains Tax (CGT), Inheritance Tax (IHT) and entrepreneurs relief could be reformed as a part of a project by the Office of Tax Simplification (OTS).

The OTS was launched last year by the new coalition government and provides the government with independent advice on simplifying the tax system in the UK.

Evidence

Giving evidence to the House of Commons Treasury Committee, John Whiting (right), tax director of the OTS, said that IHT, CGT and stamp duty could be part of a review in 2012. Whiting said that the review could follow the suggestions of the Mirrless Review, carried out by the Institute for Fiscal Studies, which suggested that IHT should be replaced by a tax on beneficiaries, abolishing stamp duty and reducing the CGT relief given on riskier investments.

In his evidence Whiting also said: “There’s definitely an argument for a radical approach”

He continued: “One of the things we started was the PAYE/NI integration exercise, and that started with radical thinking.”

“We engaged with the IFS around small businesses and there are things we have done in turn. In terms of what we will come up with next year, that has been informed by Mirrlees and if we looked at capital taxes we would have regard to the thoughts of the Mirrlees review.”

Reaction

Experts welcomed the news that some of these complex tax arrangements may be reviewed and simplified but warned that people should not expect to see lower taxes at a time when the government needs to raise as much revenue as possible to help reduce the budget deficit.

2 Responses to “Overhaul of Capital Gains and Inheritance Tax on the cards?”

  1. John N Davies says:

    Prior to the last election the Conservative party promised to raise the IHT threshold to £1 Million. What happened to this promise?

    • Phillip Bray says:

      John, the short answer is “nothing!” Of course there might be some news in the budget later on this month, although I rather doubt it. It seems that the tightening of the country’s finances has casued the government to quietly drop this idea, at least for the time being it seems. There are of course many ways of avoiding IHT, which our advisers would be happy to discuss with you if this is a particular problem for you, feel free to get in touch on 0115 933 8433 or emailing phillip.bray@investmentsense.co.uk Phil Bray (Marketing Manager, Investment Sense)

Leave a Reply