Just another class war

KEY POINTS

• Should indexation allowance be reinstated?
• The effect of the new capital gains tax regime on employee shareholders
• Entrepreneurs' relief is too narrow

The new simplified capital gains tax regime came under the Public Bill Committee's eye with Mark Hoban (Con) tabling an amendment to Sch 2 which would reinstate indexation relief.

He explained that as a consequence of the Chancellor entirely scrapping the relief under the new regime 'people who are disposing of assets acquired before 1998 will be taxed on the gains attributable to inflation'.

Farmers would be particularly affected because they own land for many years and they will be more susceptible to inflationary rises. Although the problem would 'diminish over time' figures on the HMRC website 'suggest that more than half of all assets sold in that tax year [2004-05] were held before 1998...