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Cameron hints long-term savers may see CGT concessions

Prime Minister David Cameron has hinted that he may offer capital gains tax concessions to savers with long-term assets.

In an interview in the Sunday Times, Cameron (pictured) said he does not want to “punish” savers.

The Government has proposed significantly raising CGT, potentially in line with levels of income tax.

Cameron has been facing pressure from Tory backbenchers who claim that ordinary savers selling shares or second homes would be unfairly hit.

Conservative backbencher John Redwood recently wrote an open letter to the Treasury, calling for a capital gains tax regime that tapers for long-term investments, in order to protect and reward savers.

Cameron told the Sunday Times: “I totally understand the arguments. I did not come into politics to punish people who want to do the right thing and save.”

He is expected to warn today that cuts to be announced in the emergency Budget in two weeks time will be severe, and add that Britain’s finances are worse than previously thought.

The Sunday Telegraph reported that the Government was looking at a number of exemptions from the new CGT rates, including for those nearing retirement. Today’s Financial Times reports the Treasury is playing down this idea and that a more likely approach would be the reintroduction of tapering relief.

In the Sunday Times interview, Cameron again refused to rule out an increase in VAT, which many economists suggest may be increased to 20 per cent in the upcoming emergency Budget.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. ‘Ordinary savers’ do not have second homes or portfolios of shares likely to realise anything anywhere near the CGT threshold.
    If we all have to share the pain in reducing the public debt I don’t see why the better off should be exempted.

  2. Crazy gang IFA member 7th June 2010 at 10:54 am

    Here we go round the Mulbery Bush, the Mulbery Bush……..The old system was complicated and needed rooms full of civil servants to administer, they are not looking at the whole picture ie How much will it cost to collect it, not just how much tax it collects. Why dont they just increase the flat rate from 18% to say 25%. Lets not bring in indexation again please.

  3. Matthew Gamble 7th June 2010 at 11:04 am

    Completely agree with the above comment, lets all just stay at home and live on benefits and maybe increase the amount of benefit that encourages us to be single and have more kids. That would be the better message to reinforce…idiot!

  4. The Capital Gains Tax hike to 40 percent is one tax increase too many – so lets do something about it! Join like-minded business people, pensioners and concerned parties who want to stop this ‘Dick Turpin’ tax by supporting the campaign against this daft Coalition Government proposal. Go to http://www.stopcapitalgainshike.org and register your opposition to this tax hike by contacting your local MP. Only by taking direct action can we persuade the Coalition Government to halt this highway robbery of our pensions and investments.

  5. We must learn the difference between what the new government would LIKE to do (lower taxes to stimulate inter alia enterprise) and what it is FORCED to do to address ‘New Labours’ thirteen years of profligacy. £70 billion in debt interest alone by 2014 will destroy the UK if left unchecked.Determining a fair distribution of the pain is challenging and it will be impossible to please everyone almost by definition.However the failure to grasp the mettle does not bear contemplating.My advice is to trust the judgement of the elected and be prepared to be surprised on the upside (unless your are a public servant that is!!)

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