RSS feedsChancellor Alistair Darling has defended his capital gains tax simplification – saying that it will cut down the amount of work for which taxpayers will require accountancy advice.
He told MPs: 'Apparently, 75 per cent of the people who pay capital gains tax find it so complex that they have to consult a lawyer or accountant. When something reaches that degree of complexity, we need to examine it, and this is the right thing to do.'
Darling said the new 18% rate is half the headline rate of ten years ago and enables someone who sells a business to keep 82% of their gain. He also pointed out that personal allowances would help employee shareholders and roll-over relief would be available for those selling a business and re-investing their capital.
Defying critics, he told MPs in the Commons: 'The change that we announced is the right thing to do. It simplifies the tax system, which will bring long-term gains to our economy.'
He said he accepted some people were unhappy, but insisted: 'The tax is paid by a comparatively small number of people and the allowance does protect the people whom I am sure everybody in the House would like to support.'
He came under angry attack from Tories, including shadow chancellor George Osborne, who claimed millions of small businesses will lose out, with millions of employees holding shares in their companies also at risk, threatening 'the whole entrepreneurial culture that the previous chancellor used to bang on about'.
