TUC: Capital Gains Tax rates should be increased

Date: June 21, 2010

Category: Employment Law, Taxation and Legislation for Contractors

Chancellor George Osborne should increase both the rate and coverage of Capital Gains Tax (CGT), the Trades Union Congress (TUC) has suggested.

It has pointed out that with CGT levied at 18 per cent and the highest rate of income tax at 50 per cent, there is a huge incentive for people to use accountancy tricks to turn income into capital gains.

The TUC's report claimed that around half of CGT bills are evidence of tax dodging, with people transferring assets to spouses to make the most of the system.

It has suggested that the CGT rates should be the same as those for income tax and the annual allowance for gains before tax be cut from £10,1000 to £2,000 a year, as the Liberal Democrat manifesto proposed.

Furthermore, abuse of the exemption for business sales should also be targeted, the TUC continued, and more tax inspectors hired.

"CGT is the tax dodger's tax of choice and is used by the wealthy to pay less tax than their servants," said TUC general secretary, Brendan Barber.

"It's time to get tough with a crackdown on CGT loopholes and make far more effort to stop abuse."

Posted by Sarah Putt