CGT : PBR removal of indexation relief.

Posted by AccountingWEB PM | on Fri, 12/10/2007 - 14:15 3128 1 comment

The initial focus and condemnation of the PBR changes to CGT has been on the increase in the CGT tax rate for business assets, and rightly so. But isn’t there another monstrous proposal in there? By removing Taper and Indexation Relief the Government has removed all recognition of the time value of money and returned to the taxation of non real gains. Why aren’t we up in arms about this too? If you weren’t around in the 1970’s inflation era you perhaps will not fully appreciate the seriousness of the issue that led, belatedly, to the introduction of CGT Indexation Relief.

Continued...

Monstrous new rules

mickeyparish | Mon, 17/12/2007 - 11:10 | Permalink

Thank you Edward for bringing this to the fore. I was wondering when someone wold actually say something. IMHO 18% is NOT an unreasonable rate of CGT, provided the government doesn't levy it on purely inflationary gains. This move is now guaranteed to increase short-term attitudes in investment strategies. As you point out, you have to be suspicious, when it is apparent this govermnent has spent and borrowed so assiduously in the last 5 years that the inflation and growth outlook is now at its bleakest since the mid 90's.