§ Mr. Hancock
asked the Chancellor of the Exchequer if he will seek to amend sections 16 to 18 of the Finance Act 1973 so as to reduce tax payable by orphaned children who receive low incomes from their parents' estate.
§ Mr. Moore
I am not sure what the hon. Member has in mind. Under sections 16 to 18 Finance Act 1971 the income of certain discretionary or accumulation trusts is subject to tax at the additional rate of 15 per cent. as well as the basic rate of 30 per cent. A payment to a beneficiary is treated as having suffered tax at 45 per cent., but where the beneficiary is not liable to pay tax, or is liable at less than 45 per cent., he or she can then reclaim all or part of the tax paid by the trustees.