Questioned by the Treasury Select Committee on Thursday, the Chancellor of the Exchequer, Alistair Darling, qualified his decision to remove both taper and indexation relief and introduce an 18 per cent flat rate of CGT.
However Chris Cummings, director general of AIFA, said that the Chancellor should reconsider sooner rather than later as the changes to the system would prove to be 'counter-productive' when it comes to long-term savings and investments.
Cummings said: “The Chancellor’s CGT proposals in the pre-budget report will not only affect many of our members, who will potentially be subject to a significantly higher tax bill on the sale of their business, but it will also be a huge tax-hike for many entrepreneurs.
"After being criticised by nearly every organisation representing business and enterprise in the UK, it would now be timely for the Chancellor to reconsider his decision to go ahead with a flat-rate capital gains tax regime (an increase from 10 per cent to 18 per cent for small businesses) and remove taper and indexation relief."
