UK Chancellor Rishi Sunak has asked the Office of Tax Simplification (OTS) to undertake a review of Capital Gains Tax (CGT).

The OTS has published an online survey and a call for evidence to seek views about capital gains tax. The OTS said it wants to hear directly from individuals and businesses as well as professional advisers and representative bodies about which aspects of capital gains tax are particularly complex and hard to get right, and to hear any suggestions for improvements.

The review will consider the overall scope of the tax, including its reliefs, exemptions and allowances. Katharine Arthur, a partner and head of private client at accountancy firm haysmacintyre, said the review could be hugely significant given the surprisingly broad scope given to the OTS.

"While news of the Chancellor commissioning a review of Capital Gains Tax is not surprising with an eye-watering deficit in public finances needing to be filled, on top of the historically low rates currently in place, what is interesting is the free reign given to the Office of Tax Simplification to suggest changes,” Ms Arthur said.

“This has potential to be a fundamental rejig of a complete area of tax, which could be hugely significant for both individuals and small businesses.”

Mr Arthur added that UK taxpayers had seen further complexity added to “an already complicated system” with some fundamental CGT changes this year, such as the reduction in the scope of Entrepreneur’s Relief and 30 days reporting of gains on residential property.

“A review to simplify is therefore welcome, yet with such a broad scope for change, it is crucial that the government takes time to absorb all of the information and recommendations it will receive and the interaction with other taxes, and not rush into announcing changes in the Autumn Budget."

 The OTS survey closes on 12 October 2020.