CGT relief under threat

Ex-HMRC chief questions CGT tax break Edward Troup, a former executive chair of HMRC, has called on the next government to scrap the controversial entrepreneurs' relief applied to capital gains tax. He says the tax break costs the country £2bn a year in lost tax but provides little incentive for entrepreneurship. Responding to a report which suggested a large number of the country's richest are exploiting the break to pay as little as 10% tax on billions of pounds of capital gains, he said: “This inequity would be almost entirely eliminated by the abolition of entrepreneurs' relief," tweeting: “It gives £2bn CGT savings every year to those who have already made their gains and provides no incentive for real entrepreneurship." He told the Guardian that while there are “lots of things getting in the way of people becoming great entrepreneurs … the fear of tax on future gains is not one.” HMRC data shows that 9,000 people paid just £5.1bn in tax on £33.7bn of capital gains – equating to an average tax rate of 14.8%, with it also revealed that the tax break cost the government £2.2bn in lost taxes in the 2017/18 financial year.