§ Mr. Joan Evansasked the Chancellor of the Exchequer whether he knows of any current scheme for the avoidance of tax on trading profits or rents by artificially created deductions; and what action he proposes.
§ Mr. Joel BarnettThe Inland Revenue has recently seen documents outlining an artificial tax avoidance scheme under which arrangements are made to sell an estate or interest in land with provision for it to be reconveyed at a reduced price. The object of the scheme is to produce large sums qualifying for relief under Section 83 or 134 of the Income and Corporation Taxes Act 1970.
The Inland Revenue will be examining this scheme, and any others with the same
Total tax paid Tax paid at composite rate* Tax paid at excess over basic rate† Tax paid as Investment Income surcharge† £m £m £m £m 1973–74 … … … 371 306 35 30 1974–75 … … … 545 450 50 45 1975–76 … … … 685 560 70 55 * Amounts paid by the Building Societies at composite rate. † These estimates are derived on the assumption that the interest received represents the top slice of all taxable income.