A tax on no gains

sir – A review of Capital Gains Tax (Business, July 15) may well not lead to tax rises, but it is worrying to think a Conservative government should understand so little about the tax.

The CGT rate is lower than the income tax rate because inflation indexation was removed. This means that long-term investors pay tax on illusory “gains”. Raising the rate would be political suicide.

Most countries don’t apply CGT on the sale of long-held assets for that very reason.

It is precisely long-term community investors (critical in local economies) who would be hit by any rise in CGT – and most of them would be Conservative voters.

Rodney Atkinson

Stocksfield, Northumberland