§ 48. Major NATHANasked the Chancellor of the Exchequer if he will state his estimates of the amount payable by persons with annual incomes of £5,000, £10,000, £25,000, and £50,000, respectively, in Income Tax, Super-tax, and insurance, to cover Estate Duty in the year 1913 and in the year 1930?
§ The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden)I assume that in asking for an estimate of the amount of insurance to cover Estate Duty, the hon. and gallant Member has in mind the calculation made by the Colwyn Committee on National Debt and Taxation. I will circulate in the OFFICIAL REPORT a table drawn up on this assumption. I would, however, call his attention to the fact that, as the Colwyn Committee themselves pointed out, this method of calculating the burden of Death Duties has obvious limitations.
§ Following is the table:
1629§ In Section III (pages 79 et seq.) of their Report (Command Paper No. 2800) the Committee on National Debt and Taxation effect an annual measure of the incidence of the Estate Duty on the assumption that an individual insures to such an amount that after payment of Death Duties his original capital will be intact. It is assumed that the value of the estate remains unaltered and that the same rates of Estate Duty continue in force. The Committee took two types of income, one purely investment and the other half
| A.—If the taxpayer derives all his income from investments. | |||||||||
| Total Income. | Equivalent Capital. | Year 1913–14. | Year 1930–31. | ||||||
| Income Tax. | Supertax. | Net Insurance Payment to provide for Estate Duty. | Total. | Income Tax. | Surtax. | Net Insurance Payment to provide for Estate Duty. | Total. | ||
| £ | £ | £ | £ | £ | £ | £ | £ | £ | £ |
| 5,000 | 100,000 | 292 | — | 298 | 590 | 1,007 | 306 | 819 | 2,132 |
| 10,000 | 200,000 | 583 | 175 | 725 | 1,483 | 2,132 | 1,381 | 2,322 | 5,835 |
| 25,000 | 500,000 | 1,458 | 550 | 2,000 | 4,008 | 5,507 | 5,881 | 8,583 | 19,971 |
| 50,000 | 1,000,000 | 2,917 | 1,175 | 5,176 | 9,268 | 11,132 | 14,506 | 25,349 | 50,987 |
| B.—If the taxpayer derives half his income from investments and half from earnings. | |||||||||
| £ | £ | £ | £ | £ | £ | £ | £ | £ | £ |
| 5,000 | 50,000 | 292 | — | 113 | 405 | 951 | 306 | 274 | 1,531 |
| 10,000 | 100,000 | 583 | 175 | 290 | 1,048 | 2,076 | 1,381 | 812 | 4,269 |
| 25,000 | 250,000 | 1,458 | 550 | 906 | 2,914 | 5,451 | 5,881 | 3,012 | 14,344 |
| 50,000 | 500,000 | 2,917 | 1,175 | 2,000 | 6,092 | 11,076 | 14,506 | 8,167 | 33,749 |
| The figures are given to the nearest £. |
§ 49. Major NATHANasked the Chancellor of the Exchequer if he will state his estimate of the normal amount saved and available for investment in industry by persons with the annual incomes of £5,000, £10,000, £25,000, and £50,000, respectively, who insured against estate duties in the years 1913 and 1930, respectively?
§ Mr. SNOWDENI am unable to furnish such an estimate. The amount of income saved depends not alone on the amount of taxation to be paid out of income but on the amount of personal expenditure, which is a matter beyond the powers of official estimate.
§ Mr. L'ESTRANGE MALONEIs it not a fact that a very large proportion of this money is invested in foreign countries?
§ investment and half earned, and they capitalised investment income on a five per cent. basis. The policy moneys are included in the estate at death for charge to Estate Duty. The following tables, which include the Income Tax and Surtax payable, follow the examples given by the Committee and show for a married man, aged 45 years, with three children (A) with income all investment, and (B) with income half investment and half earned, the net annual payment required to meet the Estate Duty on death.
§ Mr. SNOWDENNo doubt a proportion of it is so invested, but I could not say how much.