HL Deb 15 December 1964 vol 262 cc358-9

2.58 p.m.

LORD DERWENT

My Lords, I beg leave 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 the proposed capital gains tax will be payable on standing timber transferred to new ownership on death; and, if so, whether it will be liable to capital gains tax only when it becomes liable to estate duty and on the same basis of valuation.]

LORD RHODES

My Lords, I cannot add to the Answer which my right honourable friend the Chancellor of the Exchequer gave on December 8, but I would assure noble Lords that the substance of this Question is well understood.

LORD DERWENT

My Lords, I thank the noble Lord for his reply. It is the answer which I anticipated. May I ask the noble Lord whether he could once again bring this matter to the attention of his right honourable friend the Chancellor of the Exchequer and suggest to him that an early statement might be advisable, because it might well affect this winter's planting programme?

LORD RHODES

My Lords, I doubt whether it will be necessary to bring that particular point to my noble friend's attention, because when I said that I could add nothing to the statement that was made on December 8, I understood that the noble Lord would be aware of it. If I may refresh his memory, the Chancellor of the Exchequer said: For the purpose of the tax, realisation will include … the transfer of ownership by gift or on death. In the last two cases the asset will be treated as realised at its market value. However, the first £5, 000 of gains realised on death will be exempt; and any capital gains tax paid will be deductible from the amount of the estate for estate duty purposes." [Official Report, Commons, Vol. 703 (No. 29) col. 166, December 8, 1964.] I think, if I may say so to the noble Lord, that that is explicit.

LORD DERWENT

With great respect, may I suggest that it is not quite explicit, because standing timber has always been treated differently, from a tax point of view, from other matters, because it is a long-term planting; and, as the noble Lord is aware, even for estate duty purposes the same rules do not apply. What I am asking is that in view of the fact that estate duty rules are different with regard to standing timber, will the noble Lord bring it to the attention of his right honourable friend that this is a point that ought to be considered on capital gains, because standing timber is not equivalent to any other property or chattel.

LORD RHODES

I am obliged to the noble Lord for that supplementary question, and I will certainly tackle it again.