Tax expert suggests door is still ajar for more CGT rises

The top rate of capital gains tax (CGT) could rise as soon as next year to 40% or 50% despite the Budget already hiking it from 18% to 28%, according to accountant Marios Gregori.

Gregori, partner and tax specialist at PKF, said chancellor George Osborne (pictured) had not ‘closed the door’ on further rises for higher rate taxpayers.

‘In the Budget speech, he said raising CGT would prevent people from converting income to capital, but even with CGT at 28%, you are still getting a significant advantage compared with income tax rates,’ said Gregori.

He pointed to an HM Revenue & Customs document issued after the Budget that did not rule out the possibility of further rises in next year’s Budget. It stated: ‘The chancellor will decide the rates of CGT for 2011/12 in the Budget 2011.’

Gregori said: ‘If the 28% rate was going to run for some time, they could have made a statement saying so.’

The coalition had said after the election that it would restore the link between CGT and income tax, but Osborne said in his Budget speech that raising CGT by more than 28% would have resulted in smaller total revenues.