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I don’t want to punish savers, says PM

Prime Minister David Cameron is considering a number of capital gains tax concessions for savers, including people with long-term assets and people nearing retirement.

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

CGT changes will be announced as part of this month’s emergency Budget but the Government has hinted that savers and entrepreneurs could be spared the harshest increases.

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

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

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

Last week, Conservative backbencher John Redwood called for a CGT regime that tapers for long-term investments to protect and reward savers.

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.

Cicero Consulting director Iain Anderson says proposals to exempt people over the age of 65 are being closely examined by the Treasury.
He says: “This idea has real traction and it fits with both sides of the coalition. A re-introduction of tapering also looks like a very likely outcome.”

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