§ On capital gains tax, I propose to end the so-called "bed and breakfast" arrangements whereby companies have sought to get relief for losses on shares with which they had no real intention of parting. This will require new rules for matching shares bought and sold by companies. The Finance Bill will also put a stop to a device which goes under the name of "double banking" whereby wealthy taxpayers obtain relief for a capital loss on gilts held for more than 12 months. The new rules for both shares and gilts will apply as from today.
§ I know that some people take the view that with present rates of inflation the time has come to introduce indexation for capital gains tax. I am not yet persuaded that this would be right. There is, however, evidence that this tax is bearing unduly heavily on those who hold assets for long periods and is too lenient on those who hold for very short periods, and over the coming year I propose to review the incidence of capital gains tax. In this Budget I propose to give reliefs to working farmers, small business men and the owners of historic houses on broadly the same lines as the corresponding special concessions given for capital transfer tax.