When does everyone think the capital gains tax for individuals is going to rise from a reasonable 18% to 40% !?
- posted
13 years ago
When does everyone think the capital gains tax for individuals is going to rise from a reasonable 18% to 40% !?
In the budget.
Whether it applies from the next day or the next year is anyone's guess
tim
Not that it would stop anyone, but wouldn't changing the CGT rate mid-year cause utter confusion?
And presumably if it goes up, it goes up to the taxpayer's highest rate, so it could go to 50%??
In message , John Smith writes
Soon. About time that anomaly was rectified.
It was reduced to 18% in a package deal with abolishing indexation (or its successor). Surely raising it up to the "normal" tax rate again should re-introduce some equivalent relief.
Why? The government needs to raise revenue, not balance it.
Why? You'd just have a different rate for gains realised before budget day and another for gains realised after.
It's not really a change they'd want to announce 9 months in advance because people will get plenty of notice to bed & breakfast their gains.
Presumably.
Yes, and when there was indexation there was an inconsistency with the way interest is taxed - there was never any allowance for inflation on cash balances which earn interest so why should there have been for GCT?
The suggestion is that it wont (presumably because the Tories see the 50% band as temporary)
tim
"Andy Pandy" wrote
What about realised losses? ...
If you realised a gain of 4000 on the day before budget, and realised a loss of 1800 on the day after, then would the loss totally remove the CGT on the gain (18% of 4000 less 40% of 1800), or would you charge CGT on the net gain of ( 4000 - 1800 = )
2200? [If so, then at what rate?!]"Andy Pandy" wrote
"Why should there have been any allowance for inflation for CGT?" - Well, perhaps because of the same reason that tax on interest should also have an allowance for inflation?
You wouldn't pay any CGT because it's within the allowance. Unless they go with the LibDem proposal to reduce the threshold to 2000.
Ignoring that - I guess you'd pay CGT at the 18% rate on 2200 because the gain was made before the budget.
Perhaps it should - but they should be consistent. Given that the goverment will want to raise revenue I suspect they'll got with the consistency which increases the tax take.
Governments go through phases of encouranging us to save. If they're serious about that, they ought really to go further than taxing only interest in excess of inflation, but they ought simply not to tax savings interest at all.
At other times they want to boost the economy by encouraging us to spend, not just our earnings but our savings as well. Taxing savings interest heavily seems a good incentive to spend savings, as is creating inflation.
In message , Ronald Raygun writes
They don't tax my savings, thanks to Mr Brown's ISAs. ;-)
The impending increase in regressive VAT sent me rushing out to buy myself a new lightweight waterproof coat. I'm studying what else I want before the evil deed is done, I think it will be one of these "from midnight tonight" changes.
Can they do it before the budget?
Yes. For example, they could use the VAT regulator which provides for changes to the VAT rate to be made by Order (subject to the affirmative resolution procedure).
In passing, VAT is not universally held to be regressive. See eg the IFS
"Andy Pandy" wrote
My figures were (obviously) intended to be in excess of the threshold...
"Andy Pandy" wrote
So you'd give two people *different* rates of relief on the *same* losses incurred on the same day after the budget, just depending on whether they'd incurred a gain or not before the budget??
Mine too - which started life as Mr Major's Tessas and PEPs (or could even have been Mrs Thatchers?)
This bullshit does keep on being trotted out. VAT is not regressive, the poorer you are the more you'll spend on VAT free or low VAT stuff like non "luxury" food, rent, domestic fuel, second hand clothes etc.
It's excise duties that are incredibly regressive, particularly cigarette tax as the poor are more likely to smoke and hence pay a greater actual amount in tax, never mind percentage.
In message , Robin writes
This is true based on the premise that the poor pay a higher proportion of their income on law-rated items like food, fuel and children's clothing. It is off-set by the fact that inflation is higher for those who spend more on necessities, whilst those of us able to spend on expensive electronic toys enjoy a lower overall rate, which is why the official inflation figures are false.
I like to eat home-cooked stir-fries. Anyone else noticed how the price of peppers has escalated over the last 12-18 months? I thought it was a winter seasonal increase, but they have gone from about 62p 15 months ago to 80p this week.
I'll have to consider growing my own, or using carrots instead. :-)
In message , Andy Pandy writes
Cigarette and alcohol excise duties are avoidable. :-) I gave up cigarettes about 30 years ago, and I had a shock yesterday when the guy next to me at the newsagents counter was asked for over £5 for a pack of 20.
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