§ Mr. Cartwrightasked the Chancellor of the Exchequer if he will make a further statement about legislation to counter artificial tax avoidance schemes for the sale of land subject to a provision for it to be reconveyed.
§ Mr. Joel BarnettOn 3rd December last year, in answer to a parliamentary Question, I said that the Inland Revenue had seen documents outlining an artificial avoidance scheme for the sale of land subject to a provision for it to be reconveyed. The object of the scheme was to produce large sums qualifying for tax relief under sections 83 and 134 of the Taxes Act. I went on to say that if, after the Revenue had examined this and any similar scheme, it appeared that there could be abuse of the reliefs, appropriate counter-legislation would be introduced in this year's Finance Bill, to take effect from the date of my answer.
As my hon. Friend will have seen, there is no such legislation in the Finance Bill as published. I am advised that even under present law there is no certainty that the scheme in question would wholly achieve its objects. But so far as the Inland Revenue is aware, people in any 187W case very sensibly took note of what was said in December and have not attempted to use the scheme since then. Also the scheme has suggested the need to take a longer look at the 1963 rules for taxing premiums and the like. If there is no immediate urgency for a counter-avoidance provision we have time before next year to make a more thorough review, which will also give better opportunity of considering any similar schemes, and so of dealing with them all adequately at the same time.