Peter Vaines examines the second coming of the Finance Act
The Emergency Budget turned quickly into a Finance Act and contained some helpful clarification about the new capital gains tax rules. It was interesting to note that the day before our Budget, Russia decided to scrap capital gains tax (CGT) as a measure intended to increase economic activity. Huh. Don’t they know that you increase economic activity by big increases in taxation.
There are some transitional provisions in respect of capital gains tax to deal with gains arising before and after Budget day. There was considerable uncertainty on Budget day about the meaning of gains “arising” because those arising before 23 June are taxable at 18% and those arising afterwards may be charged at the 28% rate.
A similar uncertainty existed relating to individuals taxed on the remittance basis where a gain was made on a disposal before Budget day but was not remitted until after Budget day. The new rule is that the date of remittance will determine whether the gains are treated
