Capital gains tax hike was inevitable – but it must be done fairly

The government's proposed rise in capital gains tax makes sense. But however it's implemented, it must be straightforward - and above all, fair - says Merryn Somerset Webb.

We were pleased when Alistair Darling first cut the rate of capital gains tax from 40% to 18%. We liked the idea of having one low rate, and we really liked the way he just dumped the complications of indexation (under which the amount of CGT you paid was reduced relative to the inflation suffered during the time you had been holding your investment).

Not everyone was convinced at the time. Those who had been holding assets for the long term saw it not as a cut, just as a change in calculation methods: for them the fall to 18% merely compensated them for the extra gains taken into account by the tax man thanks to the loss of indexation.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.