FURTHER REFORM OF CAPITAL GAINS TAX IN THE BUDGET

That this House believes in fair taxation and firm measures to minimise tax avoidance; is concerned, therefore, that capital gains tax (CGT) is levied at 18 per cent., which is lower than both the top 40 per cent. and standard 20 per cent. rate of income tax; notes too, that the current annual exemption from CGT stands at £9,600, considerably more than the personal income tax allowance; recognises the urgent moral and financial need to reform CGT announced in the 2007 Pre-Budget Report, to raise rates from a minimum 10 per cent. and to abolish taper reliefs, which had cost the public purse over £20 billion in just six years; considers, however, that the reforms did not go far enough as very wealthy people still pay lower rates on unearned income than office cleaners on hard-earned low wages; believes, too, that the discrepancy in rates constitutes a huge, continuing incentive for tax avoidance; further notes Treasury estimates that a 40 per cent. rate of CGT would raise around £2 billion for hard-pressed government finances; and urges the Chancellor of the Exchequer, therefore, in the Budget to equalise CGT with the top rate of income tax, and to set out reforms, too, to the system of dual allowances.