§ Mr. Hardyasked the Chancellor of the Exchequer what is the cost to public funds of tax relief on a £450,000 mortgage in the first year of the repayment period, assuming the highest rate of relief applies.
§ Mr. Nott,pursuant to his reply [OFFICIAL REPORT, 30th April, 1973; Vol. 855, c. 247–8] gave the following information:
I do not accept that tax relief gives rise to a cost to public funds.
§ Mr. Hardyasked the Chancellor of the Exchequer what is the monthly repayment due upon a mortgage of £450,000 over a 25-year period assuming the current interest rates apply; and what is the cost of tax relief at the maximum rate in such a case during the whole of the repayment period.
§ Mr. Nott,pursuant to his reply [OFFICIAL REPORT, 30th April 1973; Vol. 855, c. 248] gave the following information:
I assume that the hon. Member is referring to an advance on the terms that the total annual payment by the mortgager is constant in amount. On that basis, the monthly repayment, taking an annual rate of interest of 9.5 per cent, would be about £3,970.
A taxpayer paying the maximum rate of tax for 1973–74 of 90 per cent on his income would receive estimated relief of £668,000 over the 25-year period.
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§ Mr. Hardyasked the Chancellor of the Exchequer what was the net rate of interest applying on mortgage interest payments where the greatest level of concession was given in 1972-73; and what is the estimate figure for the current year.
§ Mr. Nott,pursuant to his reply [OFFICIAL REPORT, 30th April 1973; Vol. 855. c. 248] gave the following information:—
Assuming gross interest rates of 8½ per cent. and 9½ per cent. for 1972–73 and 1973–74 the net equivalents, for a man liable to the highest rate of tax at 90 per cent. are 0.96 per cent. and 0.95 per cent. respectively.