A review of the capital gains tax system is ongoing to determine whether it is "appropriate".
Chancellor Rishi Sunak has asked the Tax Simplification Office to do the tax analysis, which is a tax on every profit made on the sale of assets.
The review examines rules that impose up to 28 percent on profits from residential property and 20 percent on other assets.
It is also examined whether allowances and facilities, such as the exemption for the sale of your main house, could be simplified or discarded.
However, experts suggest that the review could primarily serve to raise funds.
Tax expert Mike Warburton told the Daily Telegraph last night: "I don't think it's about simplifying taxes, I think it's about increasing revenue."
The conservative manifesto before the last election promised that there would be no increases in income tax, social security or VAT. In a letter to the OTS, Mr. Sunak said he was particularly interested in how profits are taxed compared to other types of income.
"If you are looking for ways to simplify the CGT to increase revenue, you need to look for ways to restructure home equity relief."
In a letter to the OTS, Mr. Sunak said he was particularly interested in how profits are taxed compared to other types of income.
In other twists and turns of the raging coroan virus crisis today:
- Official figures showed that GDP rose by only 1.8 percent in May and is still almost a quarter lower than in March. Cold water was poured in the hope of a V-shaped recovery.
- As of July 24, the government will oblige masks in shops with fines of £ 100 for non-compliance, despite the fact that retailers are upset.
- Scientists have warned that a second wave of coronaviruses could result in 120,000 hospital deaths this winter.
- The number of people who die Corona virus rose in Wales in the first week of July for the first time since April, official statistics showed;
The review found that yesterday's budgetary responsibility figures showed that the Chancellor is facing a budget deficit of £ 322 billion this year.
And there are also concerns that the government has left little scope to raise funds from other sources.
The conservative manifesto before the last election promised that there would be no increases in income tax, social security or VAT.
However, CGT is a modest source of income for the Treasury and is far behind income tax, social security, VAT, and corporate tax, although it is ahead of inheritance tax. CGT raised £ 8.8 billion from 2017 to 18.
A Sunak spokesman said: “In recent years, the OTS has reviewed almost all major taxes, but CGT has not.
"The OTS has addressed aspects of the CGT in some previous reports, but this will be the first time that the OTS has looked into this area."
There was a call for evidence last night that will be closed in October.
A tax-free allowance means that individuals do not pay CGT for annual profits of up to £ 12,300.
Some property taxpayers can pay lower rates of 10 percent for investment and 18 percent for residential property.
Sole proprietors can also benefit from the lower 10 percent rate.
In the documents released last night, the OTS said: "The review will take into account CGT and taxation of taxable profits on individuals and smaller businesses, and will develop recommendations for simplification, including reducing distortions from both an administrative and technical perspective."
Britain's mountain of debt is larger than GDP for the first time in decades due to the effects of the coronavirus crisis. The chart shows that the debt ratio has been much higher in the past, but Mr. Hughes said inflation can no longer be relied on to address it
Documents showed that the review would investigate areas such as the location of property in the administration, the sale or liquidation of non-legal entities, and distortions in taxpayer investment decisions.
In its call for evidence, the OTS said that there have been "several changes to the CGT" in the past decade and that "it could be helpful to reconsider the tax in the current climate".
Tom Selby, senior analyst at AJ Bell, said last night: & # 39; As UK borrowing will reach the highest level in the history of peace, Rishi Sunak's request for a CGT review feels like the starting gun for a tax collection the autumn budget this year. & # 39;
Key points in OBR's gloomy economic assessment of Britain
- GDP will decline by at least 10 percent this year, the worst recession in 300 years, with government debt larger than the economy as a whole, except for the most optimistic scenario.
- It is estimated that production may not return to the previous year's level until late 2024.
- Taking inflation into account, the country will still be 6 percent poorer in 2025 in its bleakest result.
- Unemployment could peak at 13 percent in the first quarter of 2021, which would mean that more than four million people are waiting in line.
- That would be significantly worse than the 11.9 percent unemployment rate from 1984 and the highest since modern records began in the 1970s.
- The government is expected to borrow £ 322 billion this year due to bailouts and lost tax revenue. However, this does not include the Chancellor's announcement last week that it could add another £ 50 billion to the figure.
- The watchdog warned that tax hikes and spending cuts are inevitable to offset the books.
- Debt will be lower than GDP in all but the most optimistic scenarios.
- Shocking longer-term estimates suggest that government debt could be more than five times the size of the economy by 2070.
He suggested that Mr. Sunak could consider adjusting CGT rates to match income tax rates, adding: “Such a shift could both simplify the system and increase tax revenue, especially if the current tax exemption amount currently set at £ 12,300 is either shortened or completely abolished. & # 39;
The warning comes when it was announced yesterday how that Britain has the largest peace deficit in history, with the risk that four million people will be unemployed by next year – and the economy could only recover in 2025.
In a bleak new assessment, the government's OBR watchdog warned of tax increases and spending cuts – possibly up to 7p compared to the property tax rate – are inevitable as it poured cold water in the hope of a corona virus V-shaped rebound.
GDP will fall by up to 14 percent this year, the worst recession in 300 years, and government debt will be greater than the economy as a whole. Government debt will be GBP 710 billion higher than previously expected by 2023/14. This is equivalent to almost £ 11,000 for every man, woman and child in the UK.
It is estimated that production may not return to the previous year's level until late 2024. Taking inflation into account, the country will still be 6 percent poorer in 2025 in its bleakest result.
Meanwhile, unemployment could peak at 13 percent in the first quarter of 2021 – which would mean that more than four million people are queued. That would be significantly worse than the 11.9 percent unemployment rate from 1984 and the highest since modern records began in the 1970s. The "central" forecast assumes that 15 percent of the 9.4 million vacationing jobs will be lost.
Workers and unions used the numbers to demand that the weak sector vacation program be maintained after the October end date.
The report came when the next OBR chief warned that the government could no longer rely on inflation to manage its £ 2 trillion debt pile.
Richard Hughes, who is scheduled to take over budget responsibility later this year, said earlier that the "trick" for politicians was to reduce the "real value" of the country's debt.
However, this will not be possible since massive debt was incurred during the coronavirus crisis as around a third of the shares were now tied to the RPI inflation rate.
The prestigious IFS think tank has suggested that tax increases of £ 35 billion per year will be required to stabilize public finances once the immediate crisis has subsided.
As an indicator of the magnitude, this would be approximately 7 pence on the property tax rate.
The OBR's downward scenario envisages unemployment rising to more than four million next year – at a higher rate than in the 1980s
Public debt will rise when the UK is struck by the coronavirus crisis, as evidenced by today's watchdog's key scenario. By 2023/34, liabilities will be around £ 660 billion higher than forecast in March before the chaos – and that doesn't include an additional £ 50 billion from the mini-budget