
The second report provides fourteen recommendations, which focus on dealing with the awareness of the tax and streamlining the administration behind reporting and paying CGT. The main recommendations to note are the following:
Further recommendations were also made by the OTS around expanding rollover relief rules where land and buildings are acquired under Compulsory Purchase Orders and reviewing the rules for enterprise investment schemes to ensure that current procedural and administrative issues do not prevent many from accessing these schemes. Additionally, suggestions in respect of foreign assets were made to consider whether the gains or losses should be calculated in the relevant currency and then later converted into sterling.
In light of the pandemic and existence of new homeworking arrangements, the report highlights guidance on non-residential uses of the main home. It stresses that legislative provisions and guidance should be updated and made clear that homeworking will not result in a restriction of the Private Residence Relief. Additionally, it recognises the need to update and modernise certain definitions i.e. lodgers, which is outdated and does not reflect current practices.
As these are recommendations and no changes have been confirmed yet, in many circumstances it may not be appropriate to undertake any definitive tax planning based on these recommendations. However, it is important to be aware of the kind of changes that are under consideration and potentially think about how these may impact you. Click here to read our article on the first OTS report where we delve more into how CGT reform could impact investments, gifts and businesses.
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