In his recent pre-budget report the Chancellor announced a major change to Capital Gains Tax (CGT) to take effect from April 2008.
There has been an outcry from many parts of the business community about this 80% increase in the rate of CGT charged. The rate will go from 10% up to 18%.
For those thinking about selling shares or businesses it may be worth thinking quickly, as from April 2008 (only 5 months to go) it will cost you an extra 8%!
So incensed by the Chancellors announcement Duncan Cheatle has started an e-petition on the Downing Street website, if you agree with Duncan and want to join forces with those trying to force the Chancellor to change his mind please go along and sign the petition.
These changes do however simplify the calculation of CGT for us accountants, but the wider impact is far more worrying, as yet again I think we have another poorly considered change to the tax system by the current government.
The wider implications of Alistair Darlings changes affect not only those in and investing in business but also all those employees who have shares acquired in their employer company through share incentive schemes, I bet he forgot about them, or did he?
I know it’s easy to complain and much harder to give reasoned solutions, that was when I decided to look at what Richard Murphy made of all this, and not being one to agree with Richard (well okay I do sometimes) I was decidedly encouraged to read his ‘positive changes’ (Richard’s words), and I agree!
Please go have a look at what Richard proposes, as his proposals actually keep with the objective of an 18% charge but also gives a little back and thus doesn’t catch those who are using (bettering) the system to pay less than their fair share of taxation.
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