The IMA has welcomed the Chancellor’s proposed controversial reforms to capital gains tax saying they will be good news for small savers.
IMA chief executive Richard Saunders says the current CGT rules- with different rates depending on an individuals marginal tax rate and how long you have held assets- is “hopelessly confusing” for ordinary investors.
The ABI is meeting the Treasury this week to protest against the changes to CGT suggesting it will do major damage to the insurance bond market as investors search out more tax efficient savings vehicles.
Saunders says: “With a single rate at a modest 18 per cent, and an annual exempt amount of £9,200, people will know where they stand.”
“Most savers too will be better off. The great majority of investors in funds will face a lower tax rate on their capital gains, and the minority who do not, will have the option of minimising their liability by judicious use of the annual exempt amount. And of course those who make sure they put the first £7,200 of savings each year into an ISA will face no CGT at all on that money.”