§ Mr. Frank FieldTo ask the Chancellor of the Exchequer what would be the revenue yield in a full year of restricting the annual exempt amount for capital gains tax to relief at(a) 25p and (b) 20p in the pound; and what would be the yield from abolition of the annual exempt amount for CGT, for both individuals and trusts. [23350]
§ Sir George Young[holding answer 9 May 1995]: Under current rules, net chargeable gains below the capital gains tax annual exempt amount are totally exempt from tax. The effects of restricting this relief at the 25 per cent. and 20 per cent. rates are given in the table, based on forecast 1995–96 liabilities. The estimates assume the restriction would only affect individuals with gains above the annual exempt amount and do not allow for any consequential change in their behaviour.
Capital gains tax yield (£ million) Restricting the relief to: (a) 25 per cent. rate 40 (b) 20 per cent. rate 65 It is estimated that the cost of the annual exempt amount in 1995–96 amounts to £300 million. However, consequential behavioural effects could alter the yield from abolition.
All figures exclude tax on gains made by companies, which is included under corporation tax.
§ Mr. Frank FieldTo ask the Chancellor of the Exchequer if he will publish estimates for the revenue cost/yield in a full year of altering the top rate of capital gains tax from 40 per cent. to(a) 30 per cent., (b) 35 per cent., (c) 45 per cent., (d) 50 per cent. and (e) 55 per cent., and levying the new rate on those with incomes over (i) £27,825, (ii) £30,000, (iii) £40,000, (iv) £50,000, (v) £60,000, (vi) £70,000, (vii) £80,000, (viii) £90,000, (ix) £100,000, (x) £110,000, (xi) £120,000, (xii) £130,000, (xiii) £140,000 and, (xiv) £150,000, and assuming that where the new top rate is lower than 40 per cent., the 40 per cent. band is abolished, and where it is higher, the 40 per cent. band remains in place. [23353]
§ Sir George Young[holding answer 9 May 1995]: Estimates for all the requested combinations of top rates 608W and income limits could be provided only at disproportionate cost.
Estimated revenue effects for the various top rates and four limits are given below. It has been assumed that capital gains are taxed as if they were the top slice of an individual's income and therefore the limits apply to the total of taxable income and gains. The estimates are based on forecast 1995–96 liabilities and take account of the likely effect of the changes on the volume of disposals in a full year.
Estimated revenue effects (£ million) Top rate of capital gains tax (per cent.) 30 35 45 50 55 Taxable income and gains over: £27,825 -120 -55 +45 +75 +100 £50,000 -130 -70 +40 +70 +90 £100,000 -140 -90 +30 +60 +80 £150,000 -150 -110 +25 +50 +70 These figures exclude gains made by companies which are included under corporation tax.
§ Mr. Frank FieldTo ask the Chancellor of the Exchequer if he will estimate the number of individuals with capital gains(a) below and (b) in excess of the capital gains tax threshold who pay income tax at 40p in the pound. [23355]
§ Sir George Young[holding answer 9 May 1995]: It is estimated that 32,500 of the forecast 90,000 capital gains taxpayers with liabilities in 1995–96 will pay income tax at 40p in the pound. However, I regret that reliable estimates are not possible for the number of individuals with net gains below the annual exempt amount.
All figures exclude companies making gains which are charged under corporation tax.