Cable in and capital gains tax up

Vince Cable is the new business secretary with responsibility for banking, and the rate of capital gains tax will rise as a result of the agreement between the Conservatives and the Liberal Democrats.

Cable, who was the Liberal Democrats’ Treasury spokesman, will take the business portfolio with George Osborne becoming Chancellor of the Exchequer, according to the BBC.

And according to the Financial Times, under the coalition agreement hammered out between the Lib Dems and the Conservatives, capital gains tax will be significantly increased.

It says the 18% rate on non-business assets will be increased to bring it more closely into line with the 40% higher rate of income tax, implementing a policy in the Liberal Democrat manifesto.

The FT also reports that under a package of wider reforms to banking regulation, the Tories have agreed to reverse parts of their plans to reform the FSA, again in line with Lib Dem policy opposing the overhaul.