Speaking on the BBC’s Andrew Marr show on Sunday, Duncan Smith (pictured) said no decision has yet been made on CGT rises, insisting that Chancellor George Osborne is listening to the concerns that have been expressed by the industry and Tory backbenchers.
He said: “None of the levels have been decided. The Chancellor has been clear that he is listening to everything and he will make final decisions. He has also talked about major exemptions for all sorts of different groups because we do not want this to harm entrepreneurs and we do not want to harm families that are heading towards retirement who have actually saved.
“George has discussed it with me and others and he is definitely looking for ways in which we can take the sting out of some of this.”
The Liberal Democrats pushed for the CGT rise in order to fund the increase to the tax-free income tax threshold for the lowest earners towards £10,000. The coalition agreement included plans to increase CGT, potentially to levels similar to income tax, with measures put in place to protect entrepreneurs.
Before the general election, the LibDems were calling for the annual CGT exemption limit to be reduced from £10,100 to £2,000, although reports over the weekend suggest the Government is looking to stick to the current level.
Last week senior Conservative backbenchers David Davis and John Redwood lead a revolt over the plans to hike CGT.
Davis warned that increasing CGT is unlikely to bring in the expected revenues calculated by the Government as it would be avoided by the very wealthy, while the elderly would be hit hardest.
Redwood wrote an open letter to exchequer secretary to the Treasury David Gauke in which he outlined his strong opposition to the CGT rise and suggested instead that one year gains are taxed at the top level of income tax, tapering down to 0 per cent for assets held over five years.