Wilson Nesbitt - Solicitors

Giving evidence to the Treasury select committee, Chancellor George Osborne says that he chose not to introduce taper relief on capital gains tax because it added an 'unnecessary degree of complexity' and would be abused.

The Government increased the rate of capital gains tax (CGT) to 28% for high rate earners in their emergency Budget, while savers paying basic income tax continue to pay CGT at 18%.

Explaining his decision not to introduce a taper, the Chancellor said:

“I looked at a taper and of course the last-but-one Chancellor introduced a taper and to be frank it was abused. I think from memory around 80 per cent of the tax ended up being paid at the taper because people just rolled forward their gains.

“So although yes of course the policy objective of stopping people shifting their income in the short term is a good one, but when I actually looked at the practicalities of introducing a taper it stuck me as introducing a degree of complexity which was unnecessary and not likely to achieve the policy objective.”

Lenore Rice of Wilson Nesbitt solicitors commented:

"Interestingly there is a taper system for inheritance tax that reduces liability where someone dies between three and seven years after making a potentially exempt transfer, and that has worked well. The CGT taper relief had not been there very long and perhaps people who have made long term investments for retirement income may now be severely penalised."

If you require advice on a matter of capital gains tax or any other tax matter such as inheritance tax,income tax etc, contact Wilson Nesbitt solicitors for advice by emailing estates@wilson-nesbitt.com .