David Cameron's proposed CGT taper relief plan has been condemned as a "dreadful idea" by tax experts.
The Institute for Fiscal Studies (IFS) said plans to taper the rate from profits on shares, second homes and other assets according to how long they have been held - a key concession to head off a revolt by Tory MPs - is "misguided".
"Taper relief is a dreadful idea," IFS senior research economist Stuart Adam told the Financial Times. "It is highly undesirable in terms of its economic effects.
"Persuading people to hold on to assets they would otherwise sell, to get a lower tax rate, is a misguided thing to do."
The IFS also warned the coalition's proposed exemption of business assets from the CGT increase would undermine one of the driving forces behind the change - reducing tax avoidance.
The rebuke from the independent IFS follows intense lobbying by Tory MPs against the plan to raise CGT in line with income tax.
Meanwhile, reform to corporation tax is set to be staggered over a five-year time scale - in line with the fixed term period of the Government - the Financial Times also reports, citing Whitehall insiders.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till