CGT Review Announced
Yesterday, the Chancellor announced that he has commissioned The Office of Tax Simplification to conduct a review of CGT. This is being seen as a clear sign that CGT is likely to be one of the taxes that the government will seek to help fill the hole left in public finances by the Coronavirus.
The OTS is asking individuals, businesses, professional advisers and representative bodies about which aspects of CGT are particularly complex and hard to get right, and to hear any suggestions for improvements.
The scoping document states that the review will consider CGT and the taxation of chargeable gains in relation to individuals and smaller businesses and develop recommendations for simplification including reducing distortions from both an administrative and technical standpoint. This will include consideration of general areas such as:
- The overall scope of the tax and the various rates which can apply.
- The reliefs, exemptions and allowances which can apply, and the treatment of losses.
- The annual exempt amount and its interactions with other reliefs.
- The position of individuals, partnerships and estates in administration.
- The position of unincorporated businesses and stand-alone owner-managed trading or investment companies, including the setting up, selling or winding up of such businesses or
- Any distortions to taxpayers’ personal or business investment decisions.
- Interactions with other parts of the tax system such as Income Tax, Capital Allowances, Stamp Taxes and Inheritance Tax, including potentially different definitions for similar transactions/events.
It will also look at more specific areas such as administrative or technical issues relating to:
- Clearance and claims procedures.
- Chargeable gains on shares and securities, including holdings of listed shares.
- The acquisition and disposal of property
- The practical operation of principal private residence relief
- Consideration of the issues arising from the boundary between income tax and CGT in relation to employees.
- Valuations, record-keeping, calculating any tax payable and making returns, including claiming losses.
- The information HMRC have and can use to help them reduce administrative burdens, improve customer experience and ensure compliance.
Use this link to read more or take part in the survey.
It is currently unclear when the review will report back however the consultation runs till mid-October.