§ Mr. J. Rodgersasked the Chancellor of the Exchequer if he will make a statement on the practice of the Inland Revenue in dealing with claims to marginal age relief by persons whose incomes include building society interest.
§ Mr. R. A. ButlerMarginal age relief may be claimed by a taxpayer aged 65 or more whose income slightly exceeds the limit, which until this year has been £500, at which the ordinary age relief deduction (now two-ninths) ceases to be due. It consists in restricting the taxpayer's bill to the sum of (a) what the tax would have been had the income been exactly equal to the limit plus (b) five-eighths of the income in excess of the limit.
In the past, in cases where a claimant to marginal age relief had building society interest against which personal allowances and reliefs cannot be given, and, because such interest was included in the first £500 of income, the full personal allowances and reliefs to which the taxpayer was entitled could not be given against that amount, it has been the practice of the Inland Revenue to grant a measure of additional relief. This took the form of a reduction in the amount of five-eighths of the excess of income over £500 included in the marginal relief computation.
This practice, for which there is no statutory basis, has been reviewed by the Inland Revenue, and it is felt that there is no justification for continuing it, having regard especially to recent increases in personal allowances and reliefs, and extensions of the "bands" of income chargeable at reduced rates. The concession will accordingly be withdrawn as from the current year 1953–54.