§ 13. Mr. Laneasked the Chancellor of the Exchequer whether he is satisfied with the operation of the capital gains tax as it affects householders; and if he will make a statement.
§ Mr. Joel BarnettI assume that the hon. Member is concerned about the liability to capital gains tax that may be incurred by a householder who lets part of his home. Complete exemption from capital gains tax for the residential owner occupier extends only to a house which is wholly owner-occupied. It was never the intention that it should extend to parts of the house not used by the owner as his home.
§ Mr. LaneWill the Minister take a fresh look at the serious situation in Cambridge and other university towns where householders are increasingly hesitant about letting the odd room or two for lodgings because of the capital 750 gains tax problem, coupled with uncertainty resulting from the Rent Act 1974? Should not it be within the wit of the Treasury to find a commonsense solution that will increase the supply of badly-needed lodgings without breaching the principle of the capital gains tax?
§ Mr. BarnettI am aware of the problems of students in Cambridge and elsewhere, but I should be surprised if capital gains tax were the major problem for landlords and landladies.
§ Mr. Evelyn KingAside from the problems of householders, is it not a fact that in the existing disastrous economic climate there are likely to be more capital losses than capital gains? Is not this the right moment to abolish the tax?
§ Mr. BarnettNo, Sir.