A government review of capital gains tax is to be welcomed – and is an opportunity for change

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I have already welcomed one government initiative this morning, and now let me welcome another. The Office for Tax Simplification has announced a review of capital gains tax.

In the consultation document they say that this review will 'explore simplification opportunities across the following areas:

  • the overall scope of the tax and the various rates which can apply
  • the reliefs, exemptions and allowances which can apply, and the treatment of losses
  • the annual exempt amount and its interactions with other reliefs
  • the position of individuals, partnerships and estates in administration but not trusts or residence and domicile issues
  • the position of unincorporated businesses, including the setting up, selling or winding up of such businesses
  • the position of stand‐alone owner‐managed trading or investment companies but not the positions of large or group company structures
  • any distortions to taxpayers’ personal or business investment decisions interactions with other parts of the tax system such as Income Tax, Capital Allowances, Stamp Duty Land Tax (SDLT) and Inheritance Tax

This call for evidence explores structural CGT issues, challenges commonly affecting individual taxpayers, problems commonly affecting business owners and investors, the administration of CGT, the interaction between CGT and other taxes, and the wider CGT framework. Depending on an individual’s personal circumstances there may be some overlap between these categories.'

I am on record as saying that we do not need a wealth tax, but that we do need to reform taxes in wealth. This is the logic of the part of the Tax After Coronavirus (TACs) project that addresses wealth. And this review accords exactly with that logic.

That this review also considers tax spillover effects is also very welcome.

If this is the direction for travel for the government's tax policy this is to be welcomed. I will be submitting to the review and would encourage others to do so. Materials to assist that process will be published soon. In the meantime, some is here.