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Capital Gains Tax increase could hit basic rate taxpayers

Capital Gains Tax increase could hit basic rate taxpayers

The CIoT is warning that the new Capital Gains Tax system is going to be more complex than a lot of people think.

George Osborne raised the rate to 28% for higher band taxpayers in the emergency budget on Tuesday. The increase was less than many people feared and it appears that the Chancellor “made the best out of a bad job”.

There had been calls for the Chancellor to introduce measures such as tapering or indexation allowances and the CIoT believes he chose to implement a lower than expected increase in order to avoid the complexities those measures would have caused.

The higher rate of CGT will be charged when an individual’s total income plus capital gain exceeds £43,875. This means that a basic rate taxpayer who makes a significant gain could find themselves falling into the higher CGT bracket.

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