Chancellor leaves gap between CGT and income tax untouched
Contrary to the expectations of some commentators, the Chancellor chose not to make any changes to the rate of capital gains tax in the pre-Budget Report.
The CGT rate is set at 18 per cent, while the top rate of income tax is currently 40 per cent. That top rate will soon rise to 50 per cent for those on the highest incomes.
It had been thought that Mr Darling may have introduced an increased rate of CGT in order to lessen the attraction for some taxpayers of transforming income from a business into capital as a way of sidestepping the more onerous income tax charge.
This could mean a saving of between 22 per cent and 32 per cent. But some analysts believe the Treasury may yet look at reducing the gap in rates between CGT and income tax.