At long last the government responds to calls to make CGT much tighter by saying it will not be changed currently.

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The Office of Tax Simplification has for the last 18 months forwarded suggestions and recommendations to make CGT far more compact and simpler.

OTS recommendations to HM Treasury include increasing CGT rates to be nearer to Income Tax rates and to reduce the CGT allowance.

Currently CGT’ s rate of tax for basic rate taxpayers is 18 per cent and for those in the higher tax bracket it is 28 per cent; the annual allowance remains at the initial £12,300 which is not taxable.

But OTS wants the chancellor to increase CGT to ‘mirror’ the income tax rates – 20 per cent for basic rate taxpayers and 40 per cent at the higher rate.

Another controversial recommendation made by the Office of Tax Simplification is to drastically reduce the CGT initial allowance down to £2,000.

HM Treasury sent a letter to OTS and uploaded it onto …gov.uk website and seemingly is far from impressed with the recommendations.

Lucy Frazer MP, financial secretary to the Treasury, says: “These reforms would involve a number of wider policy trade-offs and so careful thought must be given to the impact that they would have on taxpayers, as well as any additional administrative burden on HMRC.

“The government will continue to keep the tax system under constant review to ensure it is simple and efficient. Your report is a valuable contribution to that process.”