Capital Gains Tax - Emergency Tax Planning Guide Review

I have been saying for quite some time that the difference in rates between UK income tax at 50% and capital gains tax at 18% is unsustainable. Sooner or later the government will seek to close the gap. Well it looks like that time has come. There are undoubtedly major tax increases on their way but if only it were entirely that simple. UK Chancellors have for many years been trying to simplify the tax system only to end up making it more complex.

The whole debate recently about capital gains tax raises a number of questions. As we stand a few weeks before the emergency budget a new book has been published which very usefully seeks to answer and identify the main questions that need asking now. "Capital Gains Tax: Emergency Tax Planning Guide" is a brand new title by Carl Bayley. The book was published in early June just weeks before the scheduled June 22nd emergency budget. You may want to give a little thought as to why someone would go to all the trouble, time and cost of producing a painstakingly constructed 105 page book that has a shelf life of only a few weeks. I suspect that the author realises that the ideas and planning expressed will endure beyond the emergency budget. I would tend to agree with this but as always tax law changes constantly so you need to take professional advice before taking any action.

I have to admit that I am a fan of Carl Bayley's work. This author produces 'Plain English' tax Guides specifically for the layman. He has a particular talent for translating the complex and often inexplicable world of taxation into the kind of clear, straightforward language that UK taxpayers can understand. As a UK tax professional I am very used to having to trawl through dry, complex legislation. Reading Carl's work is a breath of fresh air. Very often his guides give me an idea I can put into practice or remind me of something forgotten. I am usually one of the first to go out and buy as soon as I am aware Carl has produced a new guide.

Many people are indeed considering their options and asking themselves key questions, such as:

How will my business or investments be affected?
Should I sell before the increase takes effect?
When will that be?
Is it already too late?
Is it worth it?
Is there another way I can beat the increase?

In tax planning it is vital to take all taxes into account, not just the one you are trying to avoid! I always say there's no point doing one thing to save inheritance tax if at the same time by taking this action you inadvertently give yourself a capital gains tax liability. One thing I do like about this book is that it recognises this important concept so often overlooked by the amateur do it yourself tax planner.

One of the major problems with this guide is alluded to earlier. Published only a few weeks before the budget and by the time you read it won't it be too late to take action? Well of course there is that strong possibility in which case if you're serious about this you had better get this guide pretty quick. There is a possibility however that none or at least all of the doors will be closed on 22nd June.