Capital gains tax has just seen the biggest independent review in its history. In a two-part series, our M&G colleague Les Cameron, Head of Technical at Prudential, assesses what changes could be on the horizon, starting here with tax rates and boundaries, and the annual exempt amount.
In July 2020, Chancellor Rishi Sunak asked the independent Office for Tax Simplification (OTS) to undertake a review of capital gains tax (CGT) as it applies to individuals and smaller businesses.
Sunak asked for the review to advise on opportunities to simplify the CGT regime – especially where the current rules can distort behaviour. Following calls for evidence, the OTS published its first report reviewing the key principles of CGT in November 2020. A second report this year will explore technical and administrative issues.
OTS recommendations are only advisory. But with around 50% of its recommendations having been adopted by government in the past, it’s important to know what could be in store. In a two-part series, we look at what’s being explored – starting here with CGT rates and boundaries, and the annual exempt amount.