Financial Resolutions, 1978: Financial Statement, Budget, 1978. - Capital gains tax
The present Government never opposed the principle of a tax on capital gains but they did consider that instead of a flat rate of tax there should be a sliding scale under which the speculator would pay more tax than a person who had spent the best part of a life-time building up a business. I propose with effect from 6 April next to introduce, in the case of the generality of assets, a new scale starting at 30 per cent and reducing in three-year spans to nil after 21 years. The period of 21 years will run from the date of acquisition of the asset, irrespective of when it was acquired. In the case of a limited number of assets, shares and development land, for instance, a flat rate of 30 per cent will apply. In all cases adjustments will be made to allow for inflation as measured by the consumer price idex. The changes will not result in any cost to the Exchequer in 1978 as capital gains tax is paid a year in arrears.