HC Deb 30 January 1984 vol 53 cc41-2W
Mr. Forman

asked the Chancellor of the Exchequer when it is intended to publish the draft clauses, foreshadowed in his statement of 25 July 1983, relating to capital gains tax and non-resident settlements.

Mr. Moore

With my approval the Inland Revenue is publishing draft legislation on this subject today.

The draft legislation is in two separate parts. First, there is a clause and schedule designed to enable a United Kingdom beneficiary of a non-resident trust, who has not received a payment from the trust, to defer without interest payment of any capital gains tax assessed on him under section 17 of the Capital Gains Tax Act 1979 for the year

Gross domestic fixed capital formation (GDFCF)
1970 1975 1979 1980 1981 1982 1983*
(i) £ million at current prices
(a) Central Government 578 1,243 1,537 1,728 1,814 2,136 (2,350)
(b) Local government 1,853 3,741 3,608 3,800 2,827 2,317 (2,650)
(c) Public corporations 1,679 3,920 5,624 6,651 6,899 7,221 (8,050)
(ii) £ million at 1980 prices
(a) Central Government 2,424 2,393 1,903 1,728 1,612 1,895 (2,050
(b) Local government 8,104 7,012 4,518 3,800 2,452 1,904 (2,300
(c) Public corporations 4,758 7,764 6,765 6,651 6,220 6,293 (6,800)
* Estimates for the first three quarters only, expressed at an annual rate.

Much GDFCF information is either collected directly, or is immediately converted into, the form of "purchases 1980–81 or any earlier year until such time as he, or his spouse or child or lineal descendant, obtains either directly or indirectly a corresponding benefit from the trust. These provisions would give effect to the proposals announced on 29 March 1983 by my right hon. Friend the Secretary of State for Transport, then Financial Secretary, in reply to a question about the case of Leedale v. Lewis. They would apply to any tax on assessments made under section 17 which was not paid before the date of my right hon. Friend's announcement. The clause also contains technical amendments to section 17, and to section 80 of the Finance Act 1981: these amendments would take effect from 6 April 1984.

The second part of the draft legislation consists of the provision which was introduced as clause 62 of the 1983 Finance Bill but not subsequently enacted. It provides definitions of the terms "settlor" and "settlement" for purposes of the provisions in the Finance Act 1981 relating to capital gains tax and non-resident trusts.

Our intention is to include all this legislation in this year's Finance Bill.

I announced in reply to a question on 21 December that we no longer intend to proceed with the proposals contained in clause 61 of the 1983 Finance Bill.