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CGT exemption hope for savers

CGT exemption hope for savers

Category: Savings

Updated: 07/06/2010
First Published: 07/06/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Long term savers fearing a rise in capital gains tax (CGT) might be in for a reprieve.

As part of the new coalition Government's proposals to deal with the UK's massive budget deficit, a rise in CGT has been mooted.

Although there is so far no confirmation of how big the increase will be, bringing it in line with levels of income tax is being viewed as a viable option.

This would see the rate of CGT rise from 18 per cent, towards 40 per cent or perhaps even 50 per cent.

However, in an interview with the Sunday Times, Prime Minister David Cameron said he 'did not come into politics to punish people who want to do the right thing and save.'

The statement is being seen as a suggestion that ordinary savers, and particularly those with long term savings, could be exempt from the new CGT rules or enjoy some sort of concession.

The news comes after Fidelity International suggested millions of average long term savers could be dragged into the CGT net, if the Government was to significantly reduce the tax-free allowance.

It has urged the Government to leave the tax-free allowance at £10,100 to avoid harming existing savers with modest long term gains and to ensure that people are not discouraged from making further savings for their future.

The Government's intentions will be revealed in the emergency Budget to be announced on 22 June.

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