Content
Winter Of Discontent
CGT Winners
CGT Losers
Shifty Business
Anything To Declare?
Long Arm Of The Law
Irreplaceable You
Earn As You Pay
Ask Questions Later
Capital Ideas
ISA ISA ISA
Referee!
Go Green
VAT Or No VAT?
Taking The Register
Close Encounters
May Contain Nuts
Going Concern
Ancient History
Business And Pleasure
Do Your Duty
Know Your Rights
Time To Go?
Passing The Buck
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The problem with Mr Darling's CGT proposals is that many people will pay more CGT as a result. They are a mixed bunch: basic rate taxpayers who could have paid less than 18% with taper relief after 5 years' ownership of an investment; employee-shareholders of quoted companies who would have paid 10% after two years; venture capitalists who qualified for the 10% rate on the companies they invested in. As well as those who benefited from taper relief, there are others who had a high base cost a long time ago who will lose out because they enjoy some adjustment for inflation up to April 1998. For some of these people it will be possible to take advantage of the old rules by triggering a disposal before 6 April 2008. The gain will be calculated on the old basis, and the overall result will be less tax. The problem: it's very likely that there will be some tax for 2007/08, which you wouldn't have to pay until later if you made no disposal. So would you rather pay £10,000 now to save £18,000 later? Is a bird in the hand worth 1.8 birds in the bush? There are many different issues to take into account - the type of asset involved, the long-term plans for the asset disregarding the immediate CGT change, the steps that will be required to trigger a disposal. There's also the possibility that there will be rules specifically to stop you doing this in the Budget - although there has also been a story that the rules may actually encourage you to do so, because the Chancellor likes the idea of some tax now - less tax later isn't such a problem for him. The possibilities are too many to cover in a short article, and there is no single, simple solution. If you are concerned that you may be losing out under the new regime, we will be happy to work out the figures for you and discuss what you might do about it.  |