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Capital Gains Tax

Volume 476: debated on Tuesday 20 May 2008

To ask the Chancellor of the Exchequer if he will estimate the additional revenue from capital gains tax if it were levied on companies at the same rate as corporation tax in 2008-09. (206193)

No additional revenues would be raised. Companies are not subject to capital gains tax, instead any chargeable gains accruing to them are charged to corporation tax as part of their total profits. Consequently companies' chargeable gains are already taxed at the relevant rate of corporation tax for 2008-09.

To ask the Chancellor of the Exchequer if he will estimate the additional revenue from capital gains tax if it were levied on individuals at the basic rate of income tax in 2008-09. (206194)

A reform of this kind would result in a large behavioural response and such estimates are susceptible to a wide margin of error. A broad estimate of the eventual steady state impact, taking account of the likely taxpayer response to such a change, is additional receipts in the order of £400 million a year by comparison with the current capital gains tax regime.