The government has shelved plans to raise capital gains tax and reform inheritance tax.
In the past year, the Office of Tax Simplification has published two reports into CGT at the behest of chancellor Rishi Sunak and concluded that the government should consider reforming it. One recommendation was for CGT to be aligned with income tax.
But on Tuesday (30 November), in a letter to the OTS, the Treasury passed over the suggestions made by the group in its first report on CGT, which included the proposal to consider raising the rates and lowering the allowance — signalling that the recommendations are unlikely to be implemented any time soon.
In contrast, the government accepted five recommendations made by the OTS in its second report on CGT, which covered much narrower, technical issues.
In the same letter, the Treasury also rejected making any changes to inheritance tax, as was suggested by the OTS in reports in 2018 and 2019.
