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Eversheds comment: Budget 2016 - CGT changes will frustrate many

  • United Kingdom

    16-03-2016

    Commenting on capital gains tax rate changes announced in today's Budget, Ben Jones, partner at Eversheds, says:

    “While the reduction in CGT rates will generally be well received, it is the carve-outs from this reduction that were not specifically flagged by the Chancellor in his speech that are interesting, with the current 18/28% rates still applying to gains made on carried interest and residential property. While the retention of the higher rate for carried interest is not surprising and consistent with the ongoing changes to the taxation of carry, the retention of the higher rate of tax for residential property is surprising and will for many people be frustrating.

    "Although this will only affect additional homes (a person’s main residence is exempt from CGT), for many people in the UK a second home will be the only asset on which they are likely to realise a material gain in their lifetime. On this basis, it will appear incongruous to exclude residential property from the general CGT rate reduction. It also does little to support the Government’s general policy objective to reduce the level of buy-to-let properties and second home ownership.”

     

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