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Capital Gains Tax

Volume 448: debated on Monday 3 July 2006

To ask the Chancellor of the Exchequer if he will estimate the revenue implications of replacing capital gains tax taper relief with indexation linked to the consumer prices index; and if he will make a statement. (80663)

The broad estimate of the revenue implications of replacing capital gains tax taper relief with indexation for 2006-07 is a revenue gain of £2 billion.

The figures are consistent with the assumptions made in Budget 2006 on future asset prices, and take into account the likely taxpayer behavioural responses to the tax change. It has been assumed that taper relief would be replaced completely by indexation and that any taxpayer disposing of an asset from 2006-07 onwards would get indexation relief for the duration of the investment.