§ I have studied very carefully the representations which the Inland Revenue received on its consultative document on capital gains tax and inflation. I must conclude that the practical problems for taxpayers, their advisers and the Inland Revenue alike in any scheme for indexaation or for tapering would be too great. Moreover, I do not think it would be right to give relief for inflation to investors in shares and land while investors in building societies and other fixed interest loans receive none—and while an investor can benefit from the decrease in the real value of his own borrowings.
§ But to lighten the burden on small investors I propose that an individual's gains up to £1,000 in any year should be exempt and gains between £1,000 and £5,000 charged at 15 per cent., that is, at half the full rate. A marginal relief will secure that only large gains of £9,500 or more in a year will bear the full rate. These provisions will apply to the year just ended and will replace the present exemption for small disposals and the alternative basis of charge which many people have had difficulty in understanding.