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PBR: Abolishing capital gains tax taper relief could damage advisers

Alistair Darling’s announcement that he will withdraw capital gains tax taper relief could cause serious damage to small companies like IFAs, warns tax consultant Chiltern.

In his budget, Darling said that from April 2008 he will introduce a flat rate capital gains tax of 18 per cent.

Chiltern director of direct tax Paula Tallon says the changes will mean that investors in small businesses, employees and shareholders in private companies will see their tax increase from 10 to 18 per cent, while tax for investors in property and large quoted companies will drop from 40 per cent.

She says: “There will be no incentive for people to invest in small companies and these businesses will lose much-needed funding.

“This really is a case of the rich getting richer and the poor getting poorer.”

Ernst & Young UK head of tax Paul Davies says the changes are clearly motivated by the heightened focus on private equity.

He says: “We are extremely disappointed with these proposals as they threaten to undermine the entrepreneur culture that has blossomed over the last decade. Complete abolition of the taper removes a large incentive for entrepreneurs and challenges the ‘dragon’s den’ success of the UK. It also represents a fundamental retreat from his predecessor’s key policy.”


Rent asunder

Growing repossession figures may be the first sign of cracks in the wall of buy-to-let lending that has grown up in the last few years and now rising interest rates and falling rental yields look set to further undermine the market’s foundations, says Samantha Downes

A week to bury bad news

Two months on since the credit crunch first hit the UK’s shores and job redundancies in the UK mortgage market are starting to make the headlines.

Finding security in bond markets

Martin Foden, head of credit research at Royal London Asset Management, explores the role of secured bonds, considering the impact of default and the characteristics of secured bonds versus supranationals and highlighting some examples. He also examines the evolution of the credit market and rating agency inefficiencies. Read the article in full: The value of […]


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