New Businesses: Capital Gains Tax

Viscount Trenchard Excerpts

Wednesday 20th January 2021 Lords Chamber

[Baroness Penn (Con)]

My Lords, a number of factors are taken into account by the Treasury and the OBR when assessing tax policy. On the second point, the enterprise management incentive has been protected during the Covid-19 outbreak; the Treasury has prioritised urgent support measures for people, amending legislation so that the scheme can still be used by affected firms where employees are furloughed or where their working hours have been reduced as a result of Covid.

[Viscount Trenchard (Con)]

My Lords, the rebasing for CGT purposes of assets on death, coupled with the ability to transfer via a surviving spouse who expects to live seven years, distorts the transfer of assets down the generations. Has the Minister considered introducing a capital tax regime like those of Canada and Australia, where there is no inheritance tax but also no exemption from CGT on death—instead, 50% of the capital gains arising on death is aggregated with the beneficiary’s other income and charged to income tax, leaving the other 50% untaxed?

[Baroness Penn (Con)]

My Lords, inheritance tax is currently the main tax levied at the point of death. However, I am sure the noble Lord will be aware of the Office of Tax Simplification’s report on inheritance tax; the Government are considering its findings carefully.