§ Mr. Hordern
asked the Chancellor of the Exchequer what would be the advantage or loss to the revenue if occupational pension funds were subject to income tax at 30 per cent. on their income, and pensioners of such schemes received their income free of tax.
§ Mr. Ridley
A net increase in revenue of about £900 million for 1982–83. If all the investment income—but not capital gains—of funded occupational pension schemes were subject to income tax at 30 per cent. the estimated yield is £1.9 billion. Tax paid on pensions from occupational schemes is currently estimated at £1 billion—the figure of £900 million is the difference between these two. The estimate does not take account of any changes in the nature and extent of pension provision which might occur as a result of changes in pension funds' liability to tax.