The Government has called for a comprehensive review of the capital gains tax system.
Chancellor Rishi Sunak has commissioned the Office for Tax Simplification (OTS) to review how asset sales are taxed.
Capital gains tax applies on the sales of assets such as second homes, stocks and shares, most personal possessions, and business assets.
The levy raised more than £9 billion for the Treasury in 2018/19, and is on course to fetch roughly the same figure in 2019/20.
In a letter to the OTS, Sunak said:
“This review should identify opportunities relating to technical and administrative issues as well as areas where the present rules can distort behaviour or do not meet their policy intent.”
“I would like this review to identify and advise on opportunities to simplify the taxation of chargeable gains, to ensure the system is fit for purpose.
“I would be interested in any proposals from the OTS on the regime of allowances, exemptions, reliefs and the treatment of losses.”
The review follows a separate report from the Office for Budget Responsibility, which said the Government needs to tackle the growing deficit in spending.
The Chancellor said Government spending to protect people’s jobs, incomes and businesses in the wake of the COVID-19 crisis has passed £160bn.
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