Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has made an assessment of the potential merits of introducing an inflation adjustment mechanism for capital gains tax calculations.

An indexation allowance previously existed when Capital Gains Tax (CGT) was charged at income tax rates, with a top rate of 40 per cent. The current rates of 18 and 24 per cent are significantly below the higher rates of income tax, simplifying the calculation of gains for taxpayers.

When considering changes to the tax system, the government has to take into account a wide range of factors, including the fiscal cost, administrative burdens, and complexity it would add to the tax system.