The recently announced reforms to capital gains tax (CGT) have come under fresh assault.
Criticism has been voiced by Sir Ronald Cohen, an ally of Gordon Brown and a supporter of the Labour party, who believes that the current government has underestimated the depth of feeling against the reforms.
Sir Ronald made his comments during an interview with the Financial Times. "We want to be encouraging of entrepreneurial activity," said Sir Ronald. "At the end of the day it leads to the building up of major businesses that provide major employment for people who pay major taxes and businesses that pay very substantial corporation tax," he added.
Under the terms of the proposed reforms, the current rates of taper relief would be ended and a flat rate of CGT, set at 18 per cent, introduced. Opponents of the move believe that such action will lead to a weakening of entrepreneurialism and stifle originality. Under existing CGT legislation, an individual's primary place of abode is free from taxation.