Blow to Chancellor as CGT revenues set to fall

There was bad news for the coalition government in today’s report from the Office of Budget Responsibility.  The OBR downgraded the revenue take from capital gains tax over the next few years by £1.5b.

This is particularly difficult for the coalition since the anticipated rise in CGT is supposed to pay for the planned reduction in income tax for those earning less than £10k.

What seems to have escaped many is that there are plenty of tax payers who will make their disposals now, or simply sit on their assets until the rate goes down in the future (they hope).

Many people have undertaken CGT planning in the run up to the emergency budget to ensure that gains are taxed at 18% (or 10% for some business assets).  It may still be possible to do this, although time is running out.

There is some good news in the report though, as it is predicted that the UK won’t suffer from a double dip recession.

For the Times’s view – see here

For the Telegraph’s view – see here