TAX NEWS - 2010

UK CGT: Capital Gains Tax (CGT) in 10% hike

UK Capital Gains Tax (CGT) will be hiked by only ten per cent — in a massive Tory climb down

The top rate of CGT — the tax charged on the profit made on a property and assets — will be set at 28 per cent, George Osborne will reveal today

The lower rate will be kept at 18 per cent.

This will be seen as a retreat by the Chancellor in his emergency budget.

It had been widely expected that he would hike CGT to align with income tax levels and could have meant a rate of 40 or even 50 per cent being charged.


Savings

The bulk of CGT revenues, 55 per cent, comes from assets that people have held for more than eight years, the sort used by middle-income families to save for their retirement.

It is their careful saving that a CGT rise will hit.

The news will be welcomed by families who had feared their savings could be wiped out.

The Sun can also reveal that child benefit will be frozen for 3 years.

Child benefit is currently £20.30 a week for the first child and £13.40 for other children.

It is an effective cut to child benefit in real terms as inflation continues to rise.

Chancellor George Osborne this morning briefed the Cabinet on what he said would be a "tough but fair" emergency Budget, Downing Street said.

He said: "My budget is tough but it will be fair. This is an unavoidable Budget because of the mess we have to clear up.

"So the Coalition Government will take responsibility for balancing Britain's books within five years.

"We're going to do it fairly, protecting children and pensioners, and ensuring the richest contribute the most.

"And it means getting enterprise going, because it's businesses, not government, that will create the jobs of the future."