Register to get free articles
Want unlimited access? View Plans
Already have an account? Sign in
Chancellor Rishi Sunak’s call to review Capital Gains Tax (CGT) could deal “another blow” to entrepreneurs, UHY Hacker Young has said.
It comes after Sunak asked the Office of Tax Simplification to investigate how capital gains are taxed for both individuals and smaller businesses in the UK.
Graham Boar, partner at UHY Hacker Young’s Letchworth office, said raising headline rates of CGT would come at a time when business owners are already “reeling” from the cut to Entrepreneurs’ Relief earlier this year.
He added that raising CGT would make building and selling businesses in the UK “even less attractive”.
Boar said: “After any CGT increase, we are likely to see a reduction in transactions of assets as the tax is only paid on transactions – this could cause major distortions. For example, if any CGT were imposed on homes then that would reduce the number of property transactions, drain liquidity from that market and stop labour mobility.
“Imposing CGT on the homes people live in would be a major political risk. Rather than a wholesale abolition of PPR we are more likely to see a toughening of rules around selling gardens for development and so on.”
He added: “I would not be surprised if the outcome of this review also included a toughening of CGT rules surrounding the passing on of assets at death under shelter of inheritance tax reliefs. This has been threatened for some time.”
