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https://www.gov.uk/government/publications/ots-capital-gains-tax-review-...

Pretty much all the recommendations were predictable and (assuming at least some of these are implemented) there will likely be forestalling opportunities.

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By ireallyshouldknowthisbut
12th Nov 2020 09:03

Back round the block on this it would seem, and entirely as predicted:

1. Taxes at marginal rate
2. Reintroduce indexation

Job done, same rules as the late 90's when I learnt them first time around, the only difference will be indexation will be easily computed by software as opposed to rummaging about in the back of a tax table book.

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By petercooperuk
12th Nov 2020 15:27

I think this is a case where they float out some ridiculous and unpopular ideas and then backtrack to a less offensive plan that they intended all along. That's this government's MO.

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By ireallyshouldknowthisbut
12th Nov 2020 18:13

Possibly, and it may raise revenue by people selling assets now to crystallise, but in this case there is a lot of merit to it, so long as they put the inflation linking back in, or its really inequitable if you have long held assets.

When I responded to the consultation I could find no logical reason for different rates between income and capital, other than timing in that capital gains tend to be larger an infrequent. Some form of "top slicing relief" might be equitable, or carry back to unused personal CGT allowances if those are shrunk but as ever the more you try to make it 'fair' the more complex it gets.

I see no reason why the CGT rate is 20% for 45% tax payers.

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By Paul Crowley
17th Nov 2020 09:43

That is what they always do
Even had a daft enquirer asking about the new rules heard on the News the morning after published.

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By mjshort
17th Nov 2020 08:14

The bigger problem might be the lack of uplift to market value at death.
Will they be clobbered for IHT at 40% then CGT on the later sale on the full gain at 40%?

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By Justin Bryant
17th Nov 2020 09:14

Yes; not an particularly attractive forestalling opportunity there admittedly.

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By whitevanman
17th Nov 2020 09:29

Whilst one would hope both would not apply, who knows!
I skimmed through the report when it was first released and was surprised by 2 things. First, no mention of any tightening of the PPRR rules (something one or two people on here had thought necessary).
Second, the removal of what is being called, the death uplift (which almost no-one on here thought a good idea).
I thought the biggest issue here was that the latter would be "backdoor IHT" for the little man and likely to be very unpopular.
Most people's estate is a house and little else. Whilst it may currently, be below the IHT minimum, it could now be caught for CGT. Of course the majority would not know before it caught them.
Call me a cynic but I rather suspect this is a measure Rishi is keen on and has pushed to the OTS.
It may have adverse effects on the sale of inherited properties and may further distort the market. It certainly will not make tax simpler (the stated objective) nor will it make the tax system fairer.
I have to say that overall, the report offers little that would meet these aims.

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