The annual CGT exemption allowance of £10,100 will remain unchanged this year but will rise with inflation in future years.
Savers paying the basic rate of income tax will continue to pay CGT at 18 per cent.
The 10 per cent CGT rate for entrepreneurs which currently applies to the first £2m of qualifying gains made over a lifetime will be extended to £5m to promote enterprise.
Osborne said the introduction of tapers or indexation allowances would have added “self-defeating” complexity and administration to the system.
He said the changes would protect the majority of taxpayers, keep the top-rate of CGT in line with the UK’s international competitors while keeping a simple system that reduces the incentives to convert income to capital gains.
The Government expects the changes to reap an extra £1bn of receipts which it believes will come from additional income tax payments.
The Investment Management Association welcomed the Chancellor’s decision to maintain the CGT threshold. Director of authorised funds and tax Julie Patterson says: “This provides an important buffer for those on modest to middle incomes against capital gains arising simply from inflation. It keeps thousands of basic rate tax payers out of complex annual tax calculations as they drawdown their savings during retirement. Preserving the threshold sends an important message that people should continue to be encouraged to save for the long term.”
Law firm Thomas Eggar LLP private client team partner Nicola Plant says: “High earners have already seen an increase in the top rate of tax to 50 per cent and changes affecting pension contributions. Bringing capital gains tax back into line with income tax was, therefore, a logical and not unexpected next step.”