Tuesday October 16, 08:40 AM
UK's Darling facing increasing pressure to rethink capital gains tax changes
LONDON (Thomson Financial) - Pressure is mounting on Chancellor of the Exchequer Alistair Darling to rethink the changes to capital gains tax he announced in last week's pre-budget report.
Following yesterday's letter by the UK's four main business groups to the Chancellor to suspend the proposals to abolish capital gains tax taper relief, the Conservative Party has also urged the government to think again.
George Osborne, the shadow chancellor, told the Financial Times newspaper his party would be 'campaigning with business to get the government to think again', and will vote against the measure in the finance bill legislation needed to enforce it.
The Conservatives increasingly think the Labour government has handed it a golden chance to regain its status as the political home of business.
They argue Prime Minister Gordon Brown and Darling sacrificed a potent weapon in the battle for business when they scrapped the 10 pct rate of capital gains tax for business assets held for at least two years in favour of a single 18 pct rate.
Separately, MPs on the influential trade and industry select committee will debate this week whether to summon ministers to explain the changes.
Darling has said his plan to simplify the capital gains tax changes will come into force on April 1 next year and has argued the proposed changes would ensure private equity bosses pay a fairer rate of tax.
Some private equity bosses have breathed a sigh of relief, however, because they feared that the government might tax their carried interest as income at 40 pct.
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