New Businesses: Capital Gains Tax

Debate between Lord Colgrain and Baroness Penn

Wednesday 20th January 2021 Lords Chamber

[Baroness Penn (Con)]

My Lords, the Government reformed business asset disposal relief at last year’s Budget, focusing the relief on the largest number of small business owners, ensuring they can still benefit from it, while reducing the allowance for the small number of taxpayers who were benefiting disproportionately from previous levels of relief.

[Lord Colgrain (Con)]

My Lords, I refer to my interests in the register. Does the Minister agree that, in order to foster the level of entrepreneurial investment we need after both Brexit and the pandemic, consideration should be given to increasing business asset disposal relief? Secondly, does she agree that the Government should look again at the calculation of CGT on private equity investments, where the current arrangements are disproportionately disadvantageous to taxpayers?

[Baroness Penn (Con)]

My Lords, as I said, the Government recently changed the regime for business asset disposal relief, but I reassure my noble friend that the change has kept the relief focused on small business owners and that over 80% of those using the relief were unaffected. On his second point, carried interest is a share of the profits made by a financial fund which is treated as capital gains; the Government have no plans to change rules around carried interest, but we keep all tax policy under review.