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The Chartered Institute of Taxation (CIOT) is calling for the Government to delay any changes to the current capital gains tax (CGT) rules for at least one year.

The Institute has made recommendations to the Government that any changes to CGT do not come into force until April 2009 and that, in the intervening period, a full consultation on the proposals is carried out. This will enable entrepreneurs to plan their affairs with a greater amount of certainty and make decisions for commercial reasons instead of solely for tax reasons.
 
The CIOT believes this is the only alternative to the further uncertainty caused recently by a statement in the House by the Chancellor, Mr Alistair Darling, on CGT. In the statement Mr Darling confirmed that he will not make any decisions on further changes to the CGT proposals until he is ready in the New Year.

Rob Ellerby, CIOT President, says: “The CIOT is deeply concerned that this puts many small businesses and individuals in an extremely difficult position. All businesses and individuals want to be able to plan their tax affairs with a degree of certainty. Any entrepreneur considering disposing of their business now has scant idea of the tax implications if the sale is after 5 April 2008.”

The CIOT believes that the current uncertainty means that some entrepreneurs may accelerate business sales for tax reasons instead of for commercial reasons.

Rob Ellerby adds: “The problems highlighted are due to the failure to consult on this whole area prior to making the initial announcement in the Pre-Budget Report.”

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Chartered Institute of Taxation