Despite talk of reforming capital gains tax, the March Budget swerved the issue, but the autumn statement may give the Chancellor the opportunity to tighten the rules, argue Eddie Bines and Greg Pollock from restructuring specialists Kroll
Rarely does a day go past without tax reform rearing its head in a daily financial news bulletin. In particular, continued talk of capital gains tax (CGT) reform in the UK has been widespread and resounding for some time. In the wake of the unprecedented, but necessary, public spending throughout the pandemic, the Treasury will certainly need to find ways to reduce the deficit and rebalance the UK’s finances.
Some predicted that Chancellor Rishi Sunak might put in place CGT reforms in the Spring budget in March. He didn’t, and neither was there any mention of it on so-called ‘Tax Day’ on 23 March.
Since then, President Biden has set out plans to nearly double capital gains tax for wealthy Americans, with tax rates set to soar from 20% to 39.6% for those earning more than $1m (£720,000) a year from investment income. With the UK generally following the US over time on tax policy, the question now is ‘when and not if?’ the UK will follow in the footsteps of our American cousins. It could be only a few months away, in autumn this year.
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