After having an audience with businessmen in Bolton, Lord Jones of Birmingham has revealed his opinion of Chancellor Alistair Darling’s plans to raise Capital Gains Tax to a blanket 18 per cent for all as “terrible” and said he will take his thoughts to the Chancellor.
Lord Jones, who was appointed as Minister for Trade and Industry during Gordon Brown’s reshuffling, defends the reform but has recognised the outcry of Britain’s businesses which are protesting the Chancellor’s proposals, made in his Pre-Budget Report. He has deemed the measures “revolutionary”, but also said he can see the potential threat that they pose to small companies.
The proposal is aimed at penalising private equity firms which were exploiting a loophole that allowed them to pay as little as 10 per cent Capital Gains Tax when they sold up. Those who are opposed to these plans have denounced them for the impact they will have on small businesses which will be subject to the same level of tax as large firms.
Darling’s proposed Inheritance Tax reform has also come under fire from HBOS, which has carried out research regarding the number of homes liable under the new plans that will see properties above the threshold of £600,000 subject to Inheritance Tax.
According to the research, there are 62 postcode districts in England and Wales that are subject to the new tax reform (two per cent of total houses), and 22 districts have an average house price of £600,000 – 600,000 properties are worth even more.
Martin Ellis, Halifax chief economist, said of the findings: “There are still some parts of the UK where a significant proportion of households are vulnerable to paying inheritance tax based purely on the value of their own home despite the changes to inheritance tax announced earlier this month. Nearly all the areas with the most families at risk of having to paying inheritance tax are in London and the South East.”
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