OTS first report on capital gains tax

In July 2020 the chancellor asked the Office of Tax Simplification (OTS) to carry out a review of capital gains tax to ‘identify opportunities relating to administrative and technical issues as well as areas where the present rules can distort behaviour or do not meet their policy intent.’ This was in line with the OTS’s strategic objective of looking at broader tax policy to inform wider debate. On 11 November 2020 it published the first stage of the review Capital gains tax: Simplifying by design (tinyurl.com/otscgtfirst).

Who pays capital gains tax?

Although capital gains tax brings in only just over £8bn to the exchequer it affects nearly 300 000 individual UK taxpayers every year 1.5 million over a decade and functions as an important backstop to the income tax system.

Most people do not often have to pay capital...