The UK's National Association of Pension Funds (NAPF) set out its wish list for reform of capital gains taxation last month while warning that taxing the capital gains of pension funds would result in double taxation for scheme members.

The association was responding to the government re-view of capital gains tax.

The NAPF recommends that for individual and collective investments short-term gains on assets held for 12 months should be taxed as income and that medium and long-term gains should be taxed at a low flat rate in the range of 10-15%. These changes would allow the abolition of indexation relief with loss relief remaining but only for short and long term gains.

The NAPF added that any ad-verse change would run counter to the government's stated aim of getting pension funds to focus on capital appreciation and less on income.