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CGT hike unlikely, says expert

Despite speculation of a hike in capital gains tax (CGT) in this week’s Budget, a top North East tax expert has forecast the rate to remain unchanged.

Stephen Hall, tax partner at Deloitte, in Newcastle also believes Wednesday will see the Chancellor focus on better policing the boundaries and extensions to the tax system.

A CGT hike has been widely tipped to be in Darling’s red box. The current rate of 18% could be deemed to be disproportionate to the forthcoming top rate on income tax of 50%, so there may be moves to raise CGT to help close up the gap.

However, Mr Hall said: “Everyone has noticed the 32% rate difference. Our view is that the rate will remain unaltered.

“Over the last five years, the number of CGT taxpayers has fluctuated between 195,000-260,000 – significantly fewer than the 350,000 expected to pay the 50% rate.

“However, CGT is a transaction tax, paid infrequently by a much larger population. Many occasional CGT payers will find their income tax rates unchanged.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .