The CIOT has
raised a number of concerns with the Office of Tax Simplification following
discussions on the OTS’s review of capital gains tax:
changes to tax policy should be kept
separate, as far as possible, from tax simplification proposals, making sure
that the remit of the OTS ‘to provide advice to the chancellor on the simplification
of the tax system’ is adhered to;
if changes are to be made to the scope
of CGT, the interaction of those changes with income tax and IHT would need to
be fully considered, and the ‘potential for unintended consequences minimised’;
the exclusion of trust and corporate
capital gains from the review means that the impact of CGT on all classes of potential
taxpayers cannot be addressed;
there should be more recognition of the
contrasts between income regularly arising and capital gains, especially from
long-held assets;
any changes to the current market-value
rebasing on death for CGT purposes would likely introduce complexity and would
move away from the broad principle that CGT is charged on lifetime disposals
whereas IHT is primarily charged on death.
In essence,
the CIOT’s comments highlight the potential pitfalls of piecemeal reform,
noting that ‘what is required is a proper look at capital taxation generally
including trusts’.
The CIOT has
raised a number of concerns with the Office of Tax Simplification following
discussions on the OTS’s review of capital gains tax:
changes to tax policy should be kept
separate, as far as possible, from tax simplification proposals, making sure
that the remit of the OTS ‘to provide advice to the chancellor on the simplification
of the tax system’ is adhered to;
if changes are to be made to the scope
of CGT, the interaction of those changes with income tax and IHT would need to
be fully considered, and the ‘potential for unintended consequences minimised’;
the exclusion of trust and corporate
capital gains from the review means that the impact of CGT on all classes of potential
taxpayers cannot be addressed;
there should be more recognition of the
contrasts between income regularly arising and capital gains, especially from
long-held assets;
any changes to the current market-value
rebasing on death for CGT purposes would likely introduce complexity and would
move away from the broad principle that CGT is charged on lifetime disposals
whereas IHT is primarily charged on death.
In essence,
the CIOT’s comments highlight the potential pitfalls of piecemeal reform,
noting that ‘what is required is a proper look at capital taxation generally
including trusts’.
