Accountancy Age, Accountancy Age, Wednesday 9 June 2010 at 08:03:00

Tory peer warns chancellor on capital gains tax

Baroness Noakes, the former KPMG partner and until recently a Tory Treasuryspokesman in the House of Lords, has told the chancellor that rises in capitalgains tax have "no popular support".

According to a report in theDailyTelegraph Lady Noakes has told George Osborne that the measures,expected to lift the CGT rate from 18% to something closer to 40%, have nosupport in the party or in the business community.

The plan was to levy an increase on non-business assets but the details areas yet unclear and expected to be revealed in the emergency Budget later thismonth. Prime Minister David Cameron has already hinted that the original ideamay be watered down, as had Deputy Prime Minister Nick Clegg.

A rise in CGT was a core principle in the Liberal Democrat election manifestoand was adopted by the Tories when the two parties formed the coalitiongovernment.

Reform of CGT was long expected because the differential between the CGT andincome rates was encouraging many people to convert income into capital in a bidto avoid the higher rates.

Read more:

Cameronmakes CGT climbdown

Cleggsignals backtracking on CGT