Reports indicate that David Cameron is to slate the Chancellor's capital gains tax (CGT) changes in a keynote speech on November 27, and will call for the Government to clear up confusion over the future of the tax.
Alistair Darling's controversial reforms will simplify the laws surrounding CGT by introducing a single 18 per cent rate across the board. However, with the abolition of taper relief, many businesses will effectively face an 80 per cent tax increase as a result of the measures. A large proportion of entrepreneurs are expected to consider selling business before the changes take effect on April 6, 2008.
Mr Cameron, who reportedly described the Government's reforms as "incompetent", is adding to pressure from the business community, which has been appealing against the changes since they were announced in the October pre-budget report. The Conservatives are said to adding the final touches to its plans, which include a tax reduction from 18 per cent to ten per cent for those who sell businesses when they retire. Other business owners would also be eligible for the lower rate under the Tories.
The Confederation of British Industries is again piling pressure on the Government to rethink its plans during its annual conference, which runs from November 26-27. It has commissioned a survey of small and medium-sized enterprises (SMEs) in order to assess reactions among those that will be affected by the hike. The report showed that many directors of SMEs objected to the rate change, while an overwhelming majority took issue with the Chancellor's decision to do away with taper relief.
There are calls for Mr Darling to end the "uncertainty" around the CGT issue and many hope that he will abandon the changes all together. However, although the Chancellor has hinted at potential help for certain business owners, such as those approaching retirement, he has shown little evidence of a u-turn. It is also unclear whether David Cameron and his party will commit to a complete reversal of the new tax rules.
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