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Fidelity’s Kennedy calls for calm if CGT rate rises

Fidelity International head of tax and trusts planning Paul Kennedy has urged investors not to be scared off if the Budget sees an increase in the rate of capital gains tax.

Kennedy
Kennedy: ’Kneejerk reaction’

Kennedy says the annual CGT allowance is as critical as the rate of tax and he hopes that the current £10,100 allowance is maintained.

He says: “There is a danger of a kneejerk reaction if the CGT rate goes up without looking at exactly what it means. If it were to go up from the present 18 per cent to 30 per cent and my gains are £10,000, then the rise is irrelevant. If I have a £20,000 gain, then the effective rate of tax is 15 per cent – so the allowance is as critical as the rate.

“CGT, in terms of the overall tax take, only raises pennies. Twiddling with it might appease a few people but you only raise serious money by increasing taxes that affect everybody, which are income tax or Nat-ional Insurance.”

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