We have been listening to the Conservative Party Conference speeches this week with interest. We were particularly keen to hear what Rishi Sunak had to say on tax in light of the Capital Gains Tax Review he commissioned last Summer.
In his Conference speech on 4 October, Rishi Sunak told us he is a pragmatist. He cares about what works, about fiscal responsibility, and believes that having a job is the only sustainable route out of poverty.
He’s clear that economic recovery from the pandemic “comes with a cost”. Acknowledging that tax rises are unpopular and that he would like to deliver tax cuts, he stressed that cuts are not possible unless public finances are back on a sustainable footing.
Many commentators believe Mr Sunak’s speech was setting out the case for possible tax rises to be announced in the Budget on 27 October.
One area of speculation is Capital Gains Tax (CGT), with commentators suggesting that CGT rates may be more closely aligned with income tax rates. Also muted are possible changes to CGT on main homes and the timing of CGT payments on receipt of deferred payments for business or land sales. These speculations stem from the Office of Tax Simplifications second report on the Capital Gains Tax review, first requested by Rishi Sunak in July of 2020.
Craig Simpson, tax partner at Bates Weston, reviewed the second report, published in May 2021, in his blog. Craig believes it likely that some of the OTS’ recommendations will be implemented in the Autumn Budget.
One hotly tipped but beneficial change, is the increasing of the reporting deadline for Capital Gains made on UK residential property from 30 to 60 days. Since April 2020, those with a reportable gain on UK residential property must report and pay any tax due using a Capital Gains Tax on UK property account within just 30 days of selling it.
We do not have long to wait to see what impact the OTS’ CGT review will have on the Chancellors plans for the tax.
