§ Mr. Canavanasked the Chancellor of the Exchequer whether he will investigate the incidence of avoidance of capital transfer tax by landowners transferring estate ownership to charitable trusts for which the trustees are all members of the landowner's family and their financial advisers; and whether he will seek to amend the criteria applied to charitable trusts in order to remove this abuse.
§ Mr. Denzil Davies:The Finance Act 1975 contains provisions to prevent the misuse of the capital transfer tax exemption for gifts to charitable trusts. In particular, the exemption does not apply to land or buildings if an interest has been 246W reserved or created by the donor which entitles him, his spouse, or any person connected with him to possession or occupation of the land or buildings otherwise than at the full arms length rent. If, however, my hon. Friend has evidence which suggests that the exemption is being abused and will send it to me, I shall be happy to consider it.