§ Mr. Pardoe
asked the Chancellor of the Exchequer if he will estimate for the current tax year and for 1975–76 the revenue forgone by the exemption of interest on certain British Government securities owned by non-residents, and the percentage of this which is at higher rates of tax.
§ Mr. Robert Sheldon
It is estimated that the amounts of interest on British Government securities paid in 1975–76 to non-residents other than central monetary 331W institutions was about £100 million, excluding discount on Treasury Bills. Tax on this amount at the basic rate would be £35 million. I regret that no information is available on which to base an estimate of the cost of exemption from higher rates of income tax. The £140 million paid to central monetary institutions would be exempt under international law even if the specific exemption of interest on British Government securities was removed.
Revenue forgone (£ million) Percentage at higher rates* 1975–76 1976–77† 1975–76 1976–77† Child over 16 … … 100 130 10 10 Child 11 and not over 16 … … 380 450 4 5 Child not over 11 … … 770 930 3 3 * Additional relief in excess of relief at the basic rate. † Assuming the conditional and unconditional tax changes announced in the Budget.