In a submission to the Treasury’s pre-budget report APCIMS calls on the government to move the base date and cost value for securities held prior to 1998 for the computation of capital gains tax.
Previously, indexation allowance applied to assets acquired before April 1998 allowing investors to reduce the gain arising on a disposal by taking inflationary increases into account. Taper relief and indexation allowance was abolished in this year’s Finance Bill so shares purchased between March 1982 and April 1998 no longer benefit from indexation allowance.
The trade association says long-term shareholders are being unfairly penalised and is lobbying the Government to move the base date from when gains are computed from 1982 to the value of the shares in March 1998. This would enable long term investors to uplift their cost base and ease record keeping on CGT identification rules.
ACPIMS chief executive David Bennett says: “Changes to the CGT to move the base date from 1982 to 1998 would be a major further simplification which would be welcomed by both the industry and investors. This change would also be relatively small in terms of revenue loss to the Government. Importantly it would show that the Government is not penalising long term share holders but is recognising the importance of this long term investment.”