Allied Surveyors & Valuers calls for CGT reform
CGT was introduced in 1965 by Jim Callaghan to capture short-term capital gains because of the effect of double digit inflation in the 1970’s and early 80’s. Geoffrey Howe introduced indexation and set the Base Date from which gains would be calculated as March 1982.
But Bryant-Pearson said: “Since then, there have been numerous tinkerings, ‘taper relief’ came and went, and now there are a raft of reliefs beyond the main place of residence to include ISA’s, gilts and Entrepreneurs’ Relief. But the base date has remained unaltered.
“This is an anachronism as gains made over a 30 year period can hardly be described as ‘short term’.”
Allied says this is unfair as it impacts on many investors with long held assets and CGT remains a tax on old inflation.
Bryant-Pearson added: “The size and transfer costs of property assets mean that investors in this asset class are unfairly prejudiced because they do not have the luxury of other asset classes where inexpensive portfolio churning is possible to use CGT annual exemptions (currently £10,600 per person).
“George Osborne should use his Budget to seize the opportunity to reset the Base Date for the valuation of long held assets to March 2003 but with a rolling 10 year March Base Date.
“Taking out the ‘old inflation’ would be the first step in simplifying CGT. It is crazy to still be harking back to 1982 for comparable information to assess tax liability on the gain from assets held for 31years or more.”