HC Deb 25 July 1977 vol 936 cc73-6W
Mr. Faulds

asked the Chancellor of the Exchequer what were the reasons for refusing to accept, in part satisfaction of estate duty owed by Lord Rosebery, the portrait of Mme de Pompadour by Drouais.

Mr. Denzil Davies

While the offer of items from Lord Roseberry's estate was being considered, the National Gallery informed the Government that it was prepared to purchase the Drouais from its own resources. However, the National Gallery's offer was refused by the executors. The painting was subsequently offered to the National Gallery a significantly higher price. It was not again offered in lieu of tax.

Mr. Faulds

asked the Chancellor of the Exchequer whether he will list the works of art from Lord Spencer's collection at Althorp which have (a) been accepted in satisfaction of capital taxes or (b) been purchased by public museums on terms which allow for relief from capital taxes, specifying in each case the institution concerned and the relevant cost.

Mr. Denzil Davies

Taxpayers' matters are treated in the strictest of confidence by the Capital Taxes Office and by the Treasury. It is, therefore, not our practice to give such information without the prior consent of the executors.

Mr. MacGregor

asked the Chancellor of the Exchequer if he will list the measures of relief for earned income in other OECD countries, as referred to in his Written Answer of 12th July 1977 to the hon. Member for Norfolk, South.

Mr. Robert Sheldon,

pursuant to his reply—[Official Report, 18th July 1977; Vol. 935, c. 393], gave the following information:

The following reliefs for earned income are given in other OECD countries. Some of these reliefs apply only to employment income, not to earned income generally. In the countries which allow a minimum expenses deduction the relief is given to all employees. But full relief is given for expenses actually incurred, where these are greater.

Austria

  1. (i) Minimum deduction for expenses of 4914S. (£170).
  2. (ii) Earned income relief: special tax credit of 2,000S. (00).

Belgium

  1. (i) Minimum deduction for expenses, of 20 per cent. of the first 150,000 B.Fr (£2,450) of income, 10 per cent. of the next 150,000 B.Fr and 5 per cent. of the balance, up to a maximum deduction of 75,000 B.Fr (£1.250).
  2. (ii) Earned income relief: deduction of 10,000 B.Fr (£165).

Canada

Minimum deduction for expenses of 3 per cent. of employment income, up to a maximum deduction of S250 (£140).

Denmark

Minimum deduction for expenses of 20 per cent. of employment income, up to a maximum deduction of 2,000 Kr. (£195).

Finland

  1. (i) Minimum deduction for expenses of 300 Marks (£45).
  2. (ii) Employment income relief: 25 per cent. of the first 23,200 Marks (£3,400) of income, up to a maximum deduction of 5,800 Marks (£850).

France

  1. (i) Minimum deduction for expenses of 10 per cent. of net employment income (ie after social security, etc., contributions).
  2. (ii) Employment income relief: 20 per cent. of the first 350,000 Fr (£41,900) of employment income after deduction for expenses, etc. Maximum deduction 70,000 Fr. (£8,380).

Germany

  1. (i) Minimum deduction for expenses of 564DM (£140).
  2. (ii) Employment income relief: deduction of 480DM (£120).

Greece

Employment income relief: 30 per cent. of the first 133,333 dr (£2,130) of income, up to a maximum deduction of 40,000 dr (£640).

Italy

Tax credit for employment expenses of 84,000L (£55) against national income tax. (Employment income is exempt from local income taxes).

Japan

Employment income relief: 40 per cent. of first 1.5mY, (£3,250) of income with a minimum deduction of 500,000Y (£1,080); 30 per cent. of the next 1.5mY; 20 per cent. of the next 3mY; 10 per cent. of the balance

Luxembourg

  1. (i) Minimum deduction for expenses of 12,000L.Fr (£200).
  2. (ii) Employment income relief: deduction of 10,800L.Fr (£180).

Netherlands

Minimum deduction for expenses of 4 per cent. of employment income. Minimum 200FL. (£50), maximum 800FL. (£190).

New Zealand

Minimum deduction for expenses of 2 per cent. of employment income, up to a maximum deduction of $50 (£30).

Norway

Minimum deduction for expenses of 10 per cent. of income.

Minimum 1,100Kr (£120), maximum 2,600Kr. (£290).

Portugal

Employment income relief (for "complementary tax" or surtax): 20 per cent. of the first 125,000 escudos of employment income (£1,850) up to a maximum deduction of 25,000 escudos (£370).

Spain

Earned income relief: 25 per cent. of the first 500,000 pesetas (£3,350) of income with a minimum deduction of 100,000 pesetas (£670); and 20 per cent. of the next 1m pesetas. Maximum deduction 325,000 (£2,180). The relief is given in terms of the taxpayer's effective tax rate on total income.

Sweden

Minimum deduction for expenses of 100Kr. (£13).

Switzerland

  1. (i) Federal tax: minimum deduction for employment expenses of 800S.Fr. (£190)

Tax Threshold£per week FIS Entitlement Level£per week Supplementary Benefit Level£per week
Single person … … 16.24 — 21.40
Married couple … … 24.91 — 30.45
Married couple with 1 child … … 29.68 44.80 34.55
Married couple with 2 children … … 34.45 0.30 39.50
Married couple with 3 children … … 39.88 5.80 45.60
Married couple with 4 children … … 45.33 61.30 53.00
1. It has been assumed that the children are aged 4; 4 and 8; 4, 8 and 11; and 4, 8, 11 and 1 respectively.
2. The tax thresholds take account of the proposed tax changes announced in the Chancellor's statement of 15th July. They also include the value of tax-free child benefits of £1 for the first child and £1.50 for each subsequent child.
3. As child benefits, since April 1977, are not included as an item of income for the purpose of assessing FIS payable, these too have been included in the FIS levels shown above.
4. The figures for supplementary benefit include an addition for rent and rates based on the estimated average amount allowed to an unemployed person. The estimate, based on the quarter to May 1977, is provisional.

(ii) Many cantons give employment income relief and/or allow minimum expenses deductions. There is considerable variation.

USA

  1. (i) Federal tax: top marginal rate of 50 per cent. on all earned income (top rate of 70 per cent. on other income).
  2. (ii) Taxpayers with low incomes and dependent children may qualify for earned income tax credit, of 10 per cent. of the first $4,000 (£2,325) of earned income. The credit will be reduced by either 10 per cent. of income less business expenses or earned income in excess of $4,000, whichever is the greater.