HL Deb 14 November 1985 vol 468 cc384-5

3.15 p.m.

Lord Boyd-Carpenter

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what was the yield last year and what is the contemplated yield in the current financial year of capital transfer tax levied on an individual's home or principal residence by reason of the death of that individual.

The Secretary of State for Employment (Lord Young of Graffham)

My Lords, the information is not available in precisely the form requested by my noble friend. To exempt all residential property from CTT on death is estimated to cost around £275 million to £300 million.

Lord Boyd-Carpenter

My Lords, I am much obliged to my noble friend for that helpful Answer. In view of the Government's policy of encouraging home ownership and the obvious incentive to the individual to buy his home if he can pass it on to his children, will my noble friend ensure—without anticipating the Budget Statement—that his right honourable friend the Chancellor of the Exchequer considers very specifically this particular levy, and has in mind that an exception in respect of the principal home or residence already exists in respect of CGT?

Lord Young of Graffham

Yes, my Lords. I hear clearly what my noble friend has to say, but I remind your Lordships' House that very good exemptions already exist in the case of the surviving spouse and, of course, in the case of productive assets for businesses.

Lord Barnett

My Lords, while I appreciate that the noble Lord would not wish to be rude to his noble friend or, indeed, to anyone else, would he not also agree that the plain fact is that, with this year a £67,000 exemption limit and next year a £71,000 exemption limit, there will be very few owner occupiers who will be paying capital transfer tax; and equally, if it goes to either a widow or widower, whether it be £1 million or more, there will be no capital transfer tax payable?

Lord Young of Graffham

My Lords, I am sure that I do not have to remind a former Chief Secretary that this tax is payable on all assets and not just the house.

Lord Bruce-Gardyne

My Lords, will my noble friend tell us whether or not there are any plans in this connection for looking at the implications of mortgage interest relief, in view of its impact on credit expansion and credit sales, and also its indirect impact on monetary policy?

Lord Young of Graffham

My Lords, I am afraid that in this instance my noble friend has raised an entirely different question.

Lord Barnett

My Lords, I should be obliged if the Minister would rectify his previous Answer because I fear that it may be misleading. I am sure that the noble Lord will accept that there is no capital transfer tax on the transfer of assets to a widow or widower.

Lord Young of Graffham

My Lords, I gladly give that assurance—of course there is not. However, I understood that we were talking about the value of a house which passes to children, in which case it is an aggregate.

Lord Boyd-Carpenter

My Lords, is my noble friend aware that the first supplementary question of the noble Lord, Lord Barnett, displayed, for him, an astonishing ignorance of the current level of property values?

Lord Young of Graffham

My Lords, I do not think that I have to comment on that.