§ I turn now to trusts. In 1988, as Financial Secretary, I announced a review of their tax treatment. Today, I am publishing a consultative document on possible changes to the income tax and capital gains tax regime of United Kingdom resident trusts. My proposals include an alternative structure of tax rates, which would bring the treatment of trusts more into line with the treatment of individuals. They would also help to streamline the administration of trusts, saving work for trustees and their advisers.
§ We have also been reviewing the tax treatment of non-resident trusts. This raises an important issue of principle. In recent years, the use of non-resident trusts as a means of avoiding capital gains tax has increased. I do not think that it is right for a relatively small number of wealthy people to shift very large assets into offshore trusts simply in order to avoid United Kingdom tax. Such people have already benefited from the reductions in the higher rate of income tax. I therefore propose to introduce measures to counter this tax avoidance and to prevent a revenue loss of up to £100 million in a full year.