HL Deb 03 February 1953 vol 180 cc130-1

2.38 p.m.

LORD MONKSWELL

My Lords. I beg to ask the Question which stands in my name on the Order Paper:

[The Question was as follows:

To ask Her Majesty's Government whether they will give an estimate of how much capital was sold out and paid away in taxation—not only in death duties but in all forms of taxation—in each of the years after 1945.]

THL EARL OF SELKIRK

My Lords, the noble Lord, Lord Monkswell, has asked for an estimate of the extent to which, in each of the years since 1945, taxes were paid out of capital. I regret to have to tell your Lordships that the information in the possession of Her Majesty's Government is insufficient to justify the preparation of such anestimate. In the case of income tax, surtax and profits tax, the taxpayer should not need to sell out his capital, except to the extent that he failed to make adequate provision for the tax at the time that the taxable income accrued. Some realisation of capital is, however, frequently necessary in order to pay death duties and was also probably necessary, in the higher income ranges, to pay the special contribution which was imposed by the Finance Act, 1948. The extent to which the capital has been sold in any particular case will, of course, depend on the rate of duty payable and the proportion of the assets already available in the form of cash, including the proceeds of insurance policies.

LORD MONKSWELL

While thanking the noble Earl for his answer, I must say that I regret very much that the Treasury have not any more precise information on the subject.

LORD OGMORE

Arising out of the last part of the answer, may I ask Her Majesty's Government in what ivory tower they are living if they think that it is unnecessary to sell out securities to meet income tax and death duties, particularly in the case of parents who are educating children? I would ask Her Majesty's Government to remember that I raised this point in the debate on the last Finance Bill, and I hope the Chancellor will recognise this very important fact in his next Budget.

THE EARL OF SELKIRK

What I have said this afternoon is that the information is not available—which I think is perfectly fair. The payment is frequently made from bank overdrafts and the extent to, which securities are sold cannot be made known to those who collect the taxes.

LORD OGMORE

I understood the noble Earl to say that it should not be necessary for people to sell out securities to pay income tax. If Her Majesty's Government really think that, they are living in an ivory tower.