§ Mr. Gryllsasked the Chancellor of the Exchequer what is the estimated cost to the Exchequer of double dip leasing providing means for banks and others to obtain accelerated taxation allowances to reduce their United Kingdom tax liabilities; what monitoring of this is done by the Bank of England; what is the estimated investment by British clearing banks and other financial institutions in double dip leasing involving the purchase of equipment from United States companies and the leasing back to them of the equipment within the United States of America; and if he will introduce legislation to stop this practice.
§ Mr. Peter ReesThe term "double dip leasing" is usually applied to equipment leases in which the lessor and512W lessee are resident in different countries, and the equipment attracts capital allowances in both countries. I regret that no information is available about the tax treatment overseas of equipment leased to non-residents by United Kingdom lessors.
Exchange control permission is not now required for foreign leasing.
Under provisions in the Finance Act 1980, capital allowances on the cost of equipment leased abroad are given at 25 per cent. instead of the usual rate of 100 per cent. We are keeping the working of these new provisions under review, but have no plans at present for further legislation.