HC Deb 28 April 1977 vol 930 cc411-3W
Mr. Cormack

asked the Chancellor of the Exchequer whether he will specify by Act and section the statutory provisions at present in force relating to the discharge in kind rather than cash of obligations in respect of capital taxes.

Mr. Joel Barnett

Paragraphs 17 and 18 of Schedule 4 to the Finance Act 1975, as amended by Section 124 of the Finance Act 1976, give the Board of Inland Revenue power to accept certain types of property in satisfaction of capital transfer tax. The Board has similar powers to accept property in satisfaction of estate duty under the following provisions, which remain in force in relation to deaths before 13th March 1975:

  • Section 56, Finance (1909–10) Act 1910 as amended by Section 49, Finance Act 1946.
  • Section 30, Finance Act 1953.
  • Section 34, Finance Act 1956.
  • Section 32, Finance Act 1958.
  • Section 46, Finance Act 1973.

Mr. Cormack

asked the Chancellor of the Exchequer whether he will specify the statutory requirements or other directives approved by Parliament which make it mandatory rather than optional for compensatory payments to be made from the National Land Fund to the Commissioners of Inland Revenue in respect of the discharge in kind rather than cash, to the extent permitted under statute, of capital tax obligations.

Mr. Joel Barnett

The Finance Act 1946, as amended, provides that the Treasury may pay to the Commissioners of Inland Revenue, if they think fit, the amount of estate duty or capital transfer tax satisfied by the acceptance of the property; there is no mandatory requirement.

Mr. Cormack

asked the Chancellor of the Exchequer whether he will specify the circumstances wherein, and the reasons whereby, public expenditure could be incurred when an interdepartmental financial transfer takes place within the Treasury between the National Land Fund and the Commissioners of Inland Revenue.

Mr. Joel Barnett

Transactions internal to Government are not by themselves public expenditure, but payments from the National Land Fund to the Commissioners of Inland Revenue in respect of property accepted in lieu of cash by the latter represent the acquisition of the property by Government for a consideration.

Mr. Cormack

asked the Chancellor of the Exchequer whether compensatory payments made from the National Land Fund to the Commissioners of Inland Revenue in respect of capital taxes discharged in kind rather than cash, to the extent permitted under statute, represent the agreed value of the property when accepted less such sum as may represent any tax which might have been due on the property in question had it not been so accepted.

Mr. Joel Barnett

The payments made by the Fund to the Commissioners represent the amount of tax being satisfied by the acceptance of the property. This amount is the agreed value of the property in question less 75 per cent.—or, in the case of real property, 90 per cent.—of the value of any exemption from estate duty, capital transfer tax or capital gains tax for which the property has qualified. A fuller explanation of these arrangements is contained in the Treasury memorandum "Capital Taxation and the National Heritage."

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