Aligning CGT with income tax would be a mistake, warns Andersen’s tax head
Miles Dean, Head of International Tax, is interviewed by City A.M. in relation to The Office of Tax Simplification’s proposal to align capital gains tax with income tax.
“The government’s tax advisory body published yesterday a highly anticipated report into capital gains tax, concluding that the current rules are “counter-intuitive” and created “odd incentives” in several areas…
The OTS suggested that Sunak should double both of these rates to bring them in line with income tax rates.
However, Miles Dean, tax expert and Head of International Tax at Andersen in the UK, warns that aligning CGT with income tax “is not the answer.”
“The case for lower rates of tax on capital gains is that the asset that produces the gain is more often than not acquired using taxed income. To then tax the gain at income tax rates is pernicious given that the capital has been tied up, [it] isn’t at the disposal of the individual),” Dean told City A.M.”