§ The Chancellor of the Exchequer (Mr. James Callaghan)
Now, the main structure. I have decided that it is right to retain a distinction between short-term and long-term gains; and to this extent the new tax will be dovetailed into the tax introduced in 1962 by the right hon. and learned Gentleman the Member for Wirral (Mr. Selwyn Lloyd). I propose, however, two major modifications to the 1962 tax. First, the 1962 tax extends only to a limited range of assets; but the new tax will apply to all assets, subject to the exceptions which I mentioned in my statement of 8th December. Secondly, under the present tax there are different qualifying periods, namely six months and three years, for securities and land respectively. These periods will continue to apply to assets within the scope of the present tax which taxpayers already hold today; but, for 250 the purposes of the new tax, I propose to adopt a period of 12 months in all cases.
Accordingly, gains which are realised on any chargeable assets acquired after today and disposed of within 12 months will be treated as ordinary income and taxed at ordinary income tax and surtax rates as under the 1962 Act. I do not, however, propose to apply the short-term gains tax to assets which are transferred on death; thus, under my proposal, gains realised at death will be liable to the long-term and not the short-term tax, even though the assets in question have been owned for less than 12 months.