§ Mr. Jayasked the Chancellor of the Exchequer when he intends to introduce 354W legislation to close loopholes for income-tax avoidance through discretionary trusts.
§ Mr. Peter Rees[pursuant to his reply, 27 October 1980, c. l22]: The income of United Kingdom resident discretionary trusts is liable not only at the basic rate of 30 per cent. but at an additional rate of 15 per cent. In addition, there are effective anti-avoidance rules which, for example, treat the income of a discretionary trust as the income of the settlor if, under the terms of the settlement, he or his wife can receive any benefit from it at any time. I have no present plans to change these rules. Avoidance through the use of non-resident discretionary trusts is under review in connection with the House of Lords decision in the Vestey cases and my right hon. and learned Friend the Chancellor of the Exchequer recently announced his intention of introducing legislation as soon as the right answers to the problem have been found.