Finance Act 1965: The Capital Gains Tax

DOIhttp://doi.org/10.1111/j.1468-2230.1966.tb01114.x
Published date01 March 1966
Date01 March 1966
AuthorLeonard Lazar
MAE.
1066
STATUTES
AND
REPORTS
OF
COMMITTEES
181
6.
Conclusion
The Milner Holland Report provided
a
masterly analysis of the
causes and effects of the London housing shortage and
a
blueprint
for initial action.
In
particular,
it
exposed the ineffectiveness of
some earlier attempts at cure, notably that of the free market, and
indicated that better results have been obtained abroad.
A
good
many of the points have been quickly taken. Inde5nite security
of tenure for tenants of dwelling-houses, with the new provisions
against unlawful eviction and harassment, should relieve the worst
hardships of the housing shortage. Further research is promised.
Subsidies for local authorities and housing associations are to be
improved. The new system of fair rents is
as
yet unproved, but
is
a
worthwhile attempt to get away from the problems of fixed
rents, and may keep some private landlords in the business. Yet
the Committee had
no
doubt that the economic and fiscal framework
of private renting needed to be changed-in the interests of tenants
as
well
as
landlords-if the present steady loss of private rented
accommodation
is
to be halted. The latest White Paper is not
encouraging
on
this point. The Report called
for
a
non-political
approach, freed from pre-conceived theory.
"
Non-political,"
in
relation to housing, would now seem to be impossible and, with
respect, even undesirable; major social problems
arc
inevitably
political, and thereby public attention and action are engendered.
What
can
certainly be demanded is that
no
practical solution should
be ignored for political
or
theoretical reasons.
A
question mark
hangs over privately rented housing-is
it
to be revived,
or
merely
allowed to be
an
unconscionable time a-dying
?
F.
R.
CRANE.
FINANCE
ACT
1965:
THE
CAPITAL
GAINS TAX
T~E
concept of
a
tax
on
capital gains is not new in the United
Kingdom. We have had
a
charge
to
income tax since
1962
on
(inter
alia)
short-term capital gains under Case
VII
of Schedule
D,
since
1068
on
certain lease premiums and since
1964
on
certain
payments made in respect of leased assets (land, machinery and
plant). What is new
is
the concept of
a
flat-rate tax, from
1965-66,
of
80
per cent.l
on
the long-term chargeable gains of any individual,
whether resident
or
ordinarily resident
I
in the United Kingdom.
The capital gains of
a
company are aggregated with its income
receipts and constitute
"
total profits
"
subject to
a
flat rate yet
to be determined by Parliament; if the gains are those of
a
company
not subject to corporation tax in
1965-66,
the rate and capital
gains tax is Axed at
85
per cent. What is most striking about the
1
B'roadly
spoaking,
thore
ie
an alternativo chargo to income tax (compulsory
on
tho rovenuo
if
lower)
BE
unearned income
of
tho taxpayer
in
so
far
ae
tho first
X5,OOO
of
his
not
gaine
aro concerned, from any year
of
assessment.

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