CGT 'should follow US lead'

News Article - 22 November 2007
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The government should follow the US when setting the new rate of capital gains tax (CGT), the Institute of Directors (Iod) has claimed.

CGT in the US is a flat rate of 15 per cent, which is five per cent more than the current UK rate. However, the chancellor recently proposed an increase to 18 per cent which prompted a number of protests from trade bodies, the Telegraph reports.

The government claims the 18 per cent CGT rate will produce an extra £900 million a year but the IoD has told the newspaper that the move itself would cost £900 million, making the plans futile.

Miles Templeman, director general of the IoD, said: "We know in areas of encouraging enterprise the US has always been very good. We should not be looking to Europe as the benchmark on enterprise but to the US."

Despite a previous suggestion by the government that trade bodies lobby together against the tax reforms, the IoD decided to protest separately. Earlier in the month the newspaper reported the divide suggested the alliance was "falling apart".

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