On 13 July, the Chancellor wrote to the Office of Tax Simplification (OTS) to request that a review is undertaken of Capital Gains Tax (CGT). Aspects he specifically mentions the review look into are allowances, exemptions, reliefs, losses, and how gains are taxed in comparison to income. His aim of the review is to assist in making the tax system simpler, fairer and better. Some might consider that to be quite an ambitious aim!
Subsequent to the Chancellor’s letter, the OTS has now published on online survey, and requested specific feedback by email in order to collate views, opinions and data, which will duly assist with their review. It has also provided further detail as to what the review will look at, taking into consideration the above comments:
- Scope of the tax, and its applicable rates
- Reliefs, exemptions, allowances, and use of losses
- Interaction of the annual exemption
- A focus on individuals, partnerships and estates – but not on trusts, or on residency or domicile issues
- A focus on unincorporated businesses and small companies – but not large companies or groups of companies
- Impact on personal or business decisions made by a taxpayer
- Interactions with other taxes – e.g. inheritance tax (IHT)
In the past year, the OTS has already undertaken a review into IHT. This was split into two parts – looking at both the administrative side of the tax (e.g. reporting methods, deadlines) and the technical side (e.g. the calculations). Should you wish to read a previous blog on Office of Tax Simplification review inheritance tax, please see here. It is possible that this latest review, for CGT, will follow similar lines in relation to a separate focus on these two parts.
No publication date for the review has yet been announced. However, the final window for providing certain feedback is open until 12 October. We will keep you updated on the progress of this review or its outcome and you may want to take the time and participate on this survey.