Government 'criticised' following CGT announcement

Britain's government has come under fire following an announcement by the chancellor in relation to a number of new capital gains tax (CGT) concessions.

As a consequence of Alistair Darling's statement, the government has been criticised due to the entrepreneurship message conveyed by the new measures, in addition to the theoretically negative effect upon wealth-creating individuals, reports the Financial Times.

Under the terms of the new CGT regulations, although a single - taper relief-free - rate of 18 per cent will be applied from April 6th, the government plans to implement a new system of entrepreneurs' relief, as part of a package of new measures.

"The bottom line is that the reaction of the UK government, in the face of an economic slowdown, has been to slap on a major tax hike of £700 million," said Richard Lambert, the director general of the Confederation of British Industry, an organisation that operates on a not-for-profit basis.

"This will have a damaging effect on job creation, investment and savings at exactly the wrong time in the economic cycle."

It is believed that the new system of entrepreneurs' relief will benefit around 80,000 business owners and investors.