UK expert doubts Govt will wear capital gains tax

A British tax expert expects New Zealand’s Tax Working Group will recommend a broad-based capital gains tax, only for Prime Minister Jacinda Ardern to reject the idea.

Former PwC global tax and governance leader Christopher Wales, a former economic adviser to the British Treasury, said a capital gains tax would probably aggravate the residential property situation.

Wales said he was not suggesting the Tax Working Group had been set up to fail, but believed that rejection of what might be its main recommendation would be a good political outcome for the Government.

Wales, who is visiting Wellington to research a paper he will present at Oxford University in September, said it made sense for the Government to set up the Working Group to test the public’s appetite for change.

Ardern would probably welcome a recommendation for a broadlybased capital gains tax that she could reject.

Wales said he was aware his perspective might seem ‘‘cynical’’.

‘‘I could be completely wrong. [But] if I was in her position, that is how I would be thinking about this issue.’’

Capital gains on some assets such as shares should probably be taxed, he said.

A spokeswoman for Ardern said she had no comment.

The working group has invited public submissions by the end of April.