HL Deb 04 February 1980 vol 404 cc1148-51WA
The Earl of CAITHNESS

asked Her Majesty's Government:

Whom they would consult when a claim for exemption is made under Section 77(1)(b) of the Finance Act 1976, and why.

The MINISTER of STATE, TREASURY (Lord Cockfield)

Before deciding whether land in respect of which a claim has been made is of outstanding interest, the Treasury would take advice from the relevant public sector body in England and Wales, Scotland or Northern Ireland. For scenic land the bodies are the Countryside Commission, the Countryside Commission for Scotland and the Ulster Countryside Committee. For scientific land the Nature Conservancy Council, the Nature Reserves Committee in Northern Ireland and the Forestry Commission. For historic land advice is sought from the relevant Department in England, Wales, Scotland or Northern Ireland who consult the appropriate Historic Buildings Council or ancient monuments directorate. The Agricultural Departments and the Royal Botanic Gardens at Kew and Edinburgh are also consulted in appropriate cases. The Treasury approach these bodies in order to ensure they have the advice of nationally recognised experts.

As a matter of course, consideration is given to the scenic, the historic and the scientific qualities of the land even if the applicant has indicated only one category within which he or she believes it would qualify for exemption, since it is obviously possible for an area of land to possess more than one outstanding quality.

The Earl of CAITNHESS

asked Her Majesty's Government:

What guidelines have been given to the Forestry Commission, the Country- side Commission and the Nature Conservancy Council with regard to interpreting the words "scenic", "historic" and "scientific" in Section 77(1)(b) of the Finance Act 1976.

Lord COCKFIELD

The interpretation of the words "scenic" historic" and "scientific" agreed between the Treasury and the advisory bodies is set out in paragraphs 18 to 21 of the Treasury Memorandum,Capital Taxation and the National Heritage, issued in March 1977.

The Earl of CAITHNESS

asked Her Majesty's Government:

Whether, when exemption is claimed under Section 77(1)(b) of the Finance Act 1976, the advisory body to the Treasury is required—

  1. (a) to give notice of inspection of the property to the owner before inspecting and reporting;
  2. (b) to send to the owner a copy of its report to the Treasury;
  3. (c) to meet the owner who is claiming exemption.

Lord COCK FIELD

There is no statutory obligation. However, in practice all the advisory bodies give notice of inspection and would not only be prepared to meet the owner but would wish to do so where it was necessary to discuss access and future management arrangements under Section 77(2)(b) of the Finance Act 1976 in respect of land which satisfied the quality test for designation. As advisers to the Treasury it would not be appropriate for the advisory bodies to furnish owners with copies of their reports. However, in the case of a refusal to designate, the Capital Taxes Office would state the reasons in broad terms.

The Earl of CAITHNESS

asked Her Majesty's Government:

What appeal there is when an owner is aggrieved by a decision of the Treasury when an application is made under Section 77(1)(b) of the Finance Act 1976.

Lord COCKFIELD

The Treasury's power to designate is discretionary and there is no statutory right of appeal against a refusal to designate. However, if an aggrieved applicant is able to adduce evidence which he or she believes may have been overlooked then further careful consideration would be given to the points raised.

The Earl of CAITHNESS

asked Her Majesty's Government:

Whether the Treasury are required to state to an applicant who has made an application under Section 77(1)(b) of the Finance Act 1976 the reasons for refusing such an application.

Lord COCKFIELD

There is no statutory requirement, but as a matter of courtesy the Capital Taxes Office when informing an applicant of a decision not to designate all or part of the land for which exemption had been claimed invariably states the reasons.

The Earl of CAITHNESS

asked Her Majesty's Government:

Whether, if conditional exemption has been granted under Section 76 of the Finance Act 1976 and the item being the subject of that exemption is removed or taken of necessity, 50 per cent. business relief will still be available to the owner.

Lord COCKFIELD

I am not clear what the noble Earl has in mind when he refers to an item being removed or taken of necessity. But when property which has been conditionally exempt under Section 76 of the Finance Act 1976 is sold on the open market, or the conditions for the exemption are breached, there is a charge to capital transfer tax under Sections 78 and 79 of the Finance Act 1976. That charge is on an amount equal to the value of the property at the time of the chargeable event"; there is no provision for the reduction of this amount by the capital transfer tax business relief provided by Schedule 10 to the Finance Act 1976.

The Earl of CAITHNESS

asked Her Majesty's Government:

Whether, if deferment of payment of tax is claimed under Schedule 9 to the Finance Act 1976, the owner of the item on which tax is payable is able to claim 50 per cent. business relief.

Lord COCKFIELD

I take it that the noble Earl is referring to Schedule 9 to the Finance Act 1975, which provides for the deferment of payment of capital transfer tax on the value of timber which forms part of a person's estate on death; under this provision the tax is deferred until the timber is disposed of.

Section 65 of the Finance Act 1978 provides that if, at the time of the death on which tax was deferred, timber qualified for the CTT business relief provided by Schedule 10 to the Finance Act 1976 (or would have done so if business relief had been in force at that time) then the value charged to tax if the timber is subsequently disposed of after 26th October 1977 is reduced by 50 per cent.

The Earl of CAITHNESS

asked Her Majesty's Government:

What number of applications have been received for exemption under Section 77(1)(b) of the Finance Act 1976, what number have been decided and what number approved.

Lord COCK FIELD

There have to date been 26 claims for designation under Section 77(1)(b) of the Finance Act 1976, which relates to exemption from capital transfer tax of land of outstanding scenic, historic or scientific interest. In 14 of these cases the land has been found to qualify for designation, and of these 4 have been finalised. Of the remaining 12 applications 1 was withdrawn, 1 has been rejected and the other 10 are still under consideration.