Finally Darling, a Capital Gains Tax Decision

Small Business News

At last, Alistair Darling makes up his mind on Capital Gains Tax.

The wait is over. After initially announcing in his first pre-budget report back in October last year that he would eliminate Taper Relief on Capital Gains Tax and have a "simplified" flat rate, then dithering after the grave concerns of the small business community and promising a CGT concession decision within 3 weeks at the end of November, Alistair Darling has finally announced his plans.

The chancellor will stick to his guns on the 18% flat rate for all Capital Gains Tax, abolishing Taper Relief from 1st April, but will allow a 10% rate on gains of up to £1m, supposedly to assist entrepreneurs.

The Confederation for British Industry referred to the episode as a "£700m Raid on Invetors & Savers at exactly [the] wrong time for [the] economy" with Richard Lambert, Director General of the CBI, noting that the move is an effective "tax hike", has been badly handled and will do nothing for long-term investments in small business, especially at a time of slowing growth for the economy.

He added:

"Although £1 million might sound a lot, it could have been built up over twenty or thirty years...To be given ten weeks to make major business decisions is simply not reasonable."

...and went on to say that the whole CGT/Taper Relief affair had damaged the relationship between the Government and business and would take both time and effort to rebuild any trust.