The Chancellor, Rishi Sunak, has commissioned a report into the UK’s Capital Gains Tax (CGT) system, it has been announced.
The review will be conducted by the Office of Tax Simplification, with a survey being launched, asking for evidence to seek views about CGT.
Some experts believe that the Government may be exploring the possibility of raising CGT as it looks to offset the £350 billion deficit as a result of the emergency coronavirus spending, which has funded the Coronavirus Job Retention Scheme, Self-Employment Income Support Scheme and other business support measures.
The figures include £30 billion in spending announced by the Chancellor last week, including £9 billion on the Job Retention Bonus Scheme, as well as a jobs programme and green energy programme.
Currently, there are a number of exemptions on CGT, with anyone who sells their main residence being exempt from the tax, but these exemptions will now be under review.
The current tax-free allowance of £12,300 is also under consideration, with the potential for this to be reduced to raise more revenue.
Experts believe that the review indicates the Government’s intentions to explore a further review of wealth taxes as it attempts to address the significant deficit as a result of the COVID-19 pandemic.
The Treasury has, however, played down the significance of the review, stating: “This is standard internal working. There is no expectation or plans for policy changes as a result.”
For help and advice, contact our expert team today.