On 8 January, HM Treasury published a summary of existing coronavirus economic supports and indicated that the government has spent £280 billion so far. Against this backdrop, Chancellor of the Exchequer, Rishi Sunak, will be under pressure to find revenue-raising measures to finance the economic packages made available. The Spring Budget on 5 March presents the earliest possible date for such change to be announced.
If the Conservative Party is to keep the manifesto pledge not to raise Income Tax, National Insurance or VAT, it may well be that Capital Gains Tax (‘CGT’) and Inheritance Tax (‘IHT’) are ripe for reform.
Last summer, Rishi Sunak wrote a letter to the Office of Tax Simplification (‘OTS’) instructing that a review of CGT, and aspects of the taxation of chargeable gains in relation to individuals and smaller business, be undertaken. The remit of the review was wide, as it was to cover “administrative and technical issues, as well as areas where the present rules can distort behaviour”. The Chancellor, in particular, was “interested in any proposals from the OTS on the regime of allowances, exemptions, reliefs, and the treatment of losses within CGT, and the interactions of how gains are taxed compared to other types of income”.