Gordon Brown will announce that capital gains tax for investors in all companies is to be slashed at a cost of up to pounds 150m a year to the Treasury. In addition Stephen Byers, the Secretary of State for Trade and Industry, who has worked closely with the Chancellor on the "enterprise strategy", will announce on Wednesday the creation of a pounds 100m hi-tech venture capital fund.
In his statement, Mr Brown is expected to say that British investment has been too low; that the Right encouraged enterprise at the expense of fairness while the Left wanted fairness at the expense of enterprise. He will present the tax breaks as a move to encourage hi-tech companies, but it will go wider than that, and will be available to all investors.
Investors will receive a reduction in capital gains tax to 10 per cent if they hold an asset for 10 years but the Chancellor has been told that this is too long and that new companies will need a quicker return.
Mr Brown will say that he is planning to allow a fall each year from capital gains tax of 40 per cent, cutting to 20 per cent the tax paid by an investor selling his holding after three years. It would drop to 10 per cent after five years. There will be a roll-over of capital gains for investors who move from one company to another.
Review, page 3Reuse content