Only a month or so into its first term, the Government is coming under attack from one of its own backbench MPs to re-examine its plans to increase capital gains tax rates.
Conservative MP John Redwood described the proposals as “unfair”, saying they would hit “anyone who saves, is prudent, or who ventures their money for the greater good”.
He has also written to the Treasury calling for them to rethink the policy.
The new Coalition Government would appear to be adopting the policy set out in the Lib Dem Manifesto, which said that the CGT rate should be aligned with the rate of income tax.
This would mean charging CGT at 40 or 50 per cent for high earners – a substantial increase on the current 18 per cent flat-rate.
Mr Redwood has suggested an alternative proposal based on the previous system we had of taper relief, with increased relief being offered for longer-term investment.
The Times reports an unnamed sources saying that the chancellor might be considering watering down his plans, though detailed proposals have yet to be made public