By Nizar Manek, 7 January 2010
The next budget may narrow the gap between income tax and CGT, but the only way to pre-empt tax avoidance is to align them
Speculation is growing that the next budget will narrow the gap between the rates of income tax and capital gains (CGT). This might seem irrelevant to most taxpayers, but the implications for the Treasury and Inland Revenue are big.
Already, the expectation of a change in the rates is spawning major pre-budget tax avoidance schemes, with a frenetic rush into investments designed to generate capital gains rather than income. Tax advisors are recommending that investors sell up and realise taxable gains at the current 18% rate. An April budget will almost certainly see CGT more closely aligned with the 52% top rate of income tax.
(760 words) https://www.theguardian.com/commentisfree/2010/jan/07/income-capital-gains-tax