The chancellor Rishi Sunak has asked the Office of Tax Simplification (OTS) to carry out a review into capital gains tax.

    The call for evidence from the OTS focuses on the aspects of CGT that are "particularly complex and hard to get right" as well as any suggestions for improvements. 

    Tony Wickenden outlines the scope of the review as the government sets out on what may be the first step towards Covid-19 tax rises. 

    Tony explains the chancellor has asked the OTS to focus on "areas where the present rules can distort behaviour or do not meet their policy intent."

    Rishi Sunak is also keen to see proposals on "the regime of allowances, exemptions, reliefs and the treatment of losses within CGT, and the interactions of how gains are taxed compared to other types of income."

    The review follows similar work carried by the OTS on inheritance tax

    Tony discusses the potential changes we could see to CGT as a result of the review, namely the potential to re-link CGT with income tax rates. 

    He suggests we may not see further changes to business related capital gains, given the recent changes to entrepreneurs' relief

    He also looks at the consequences the CGT review could have on the attractiveness of investment bonds. 

    The call for evidence is seeking high-level comments on the principles of CGT by 10 August, and more detailed comments on the technical aspects and operation of CGT by 12 October.

    You can read more about the OTS review of CGT here.

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