our parliamentary correspondent, Accountancy Age, Thursday 3 June 2010 at 08:11:00

Sustained attack on impending CGT reform takes its toll


Liberal Democrat leader Nick Clegg appears to have conceded that proposals for an increase in capital gains tax will have to be tempered to meet angry criticism from Tory right-wingers.

During an interview on BBC's Radio 4 he declined to be drawn on exactly what form concessions might take but indicated work is under way and that some form of tapering is among options being considered.

Critics have urged protection for savers who have invested in property for their retirement as well as for business assets.

He said: "It is impossible to start picking off whether you believe in indexation, so you don't tax the increase in the value of assets through inflation, and you have to couple that with consideration of what rates you use. "

He said speculation on the outcome was futile because the work has not yet been finished.

The Coalition Agreement specifies: "We will seek ways of taxing non-business capital gains at rates similar or close to those applied to income, with generous exemptions for entrepreneurial business activities."

The later Queen's Speech watered this down to: "Capital gains on non-business assets will be tackled at rates closer to those applied to income tax, with generous exemptions for entrepreneurs."

Lib Dem leaders ascribe fury on the Tory right, lead by former Tory minister John Redwood, for being at least partly responsible for the political attacks on former Chief Secretary David Laws and on his replacement Danny Alexander.

Laws quit after it was alleged he claimed rent paid to his gay partner against Commons expenses rules.

Alexander has been accused of avoiding CGT on selling a second home in London after buying a main home in Aviemore.

He was also derided as "Minister for Gluttony" after it was disclosed he claimed 14,000 over four years in subsistence to which he was entitled under the rules.

Read more:

Care home resident to be caught by CGT rise

CGT reform under Redwood attack