Changes To CGT Flouting EU Law

Thu, 31 Jan 2008

The chancellor's amendments to capital gains tax (CGT) are breaching European law, the Institute of Chartered Accountants of Scotland have claimed.

The organisation said the government has not provided businesses with a "reasonable" time period in which to emphasize their position before the CGT changes are introduced.

The chancellor’s announcement, made on January 24th, allows ten weeks for taxpayers to make the transition, compared to previous legal decisions which indicate that taxpayers should be given at least 90 days.

From April 6th a flat CGT rate of 18 per cent on all gains upward of £1 million will be introduced, while indexation and taper relief will be abolished.

Derek Allen, the organisation’s director of taxation, said: "It would be irresponsible to enact complex changes and not give a sufficient transitional period for taxpayers to consider the implications and arrange their affairs properly."

Allen claimed a delay of two years should be given before implementation, or at the very least a two-year period should be allowed in order to sell assets and gain indexation benefits .
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