Capital Gains Tax(CGT) is set to rise on so called 'non-business' assets under the new Coalition Government to help reduce income tax for low earners.
Details are now starting to emerge of the policy negotiations the Conservative/Liberal Coalition agreed on to form a historic new Government last night.
These include a substantial increase in the capital gains tax (CGT) paid on so-called "non business" assets such as second homes and shares, in order to cut income tax for lower paid workers on the first £10,000 of earnings.
From April 2011, there will be a "substantial increase" in the tax-free allowance for earnings. At the same time, CGT could rise from 18% to 40% or even 50% on the sale of some assets.
Other tax swaps include the Lib Dems' agreement to drop plans for a "mansion tax", while the Conservatives have ditched their pledge to raise the inheritance tax threshold to £1m.
The new administration will also scrap Labour's planned rise in National Insurance but some of the benefits will also go to reducing income tax thresholds for lower earners.
The Liberal Democrats have also agreed not to block the Tories' proposed tax break for married couples, although they will not support the policy. This could mean it is still introduced.
All these tax changes, as well as proposed cuts of £6bn to public services, will be unveiled by new Chancellor George Osborne in an emergency Budget within the next 50 days.
Cuts to non-frontline services in 2010/11 were a key plank of the Tories' manifesto, and have been accepted by Clegg's party as part of negotiations to include the Lib Dems in a power-sharing deal.
Trident will also feature in the Budget, with the two sides settling on a commitment to replace the nuclear missile system despite Clegg's repeated election campaign claim it is a waste of money. However the two parties say any replacement plans will be scrutinised for economic value.
The Lib Dems have also agreed to a cap on immigration and a commitment not to join the Euro for the lifetime of the Parliament.
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