§ Sir Brandon Rhys Williamsasked the Chancellor of the Exchequer, further to his reply to the hon. Member for Kensington, Official Report, 21 December 1982, c. 499, what level of tax allowance could be financed on a revenue neutral basis in 1982–83 assuming (a) that all tax reliefs and allowances were limited to the standard rate of tax, (b) abolition of the age allowance and (c) replacement of married man's and wife's earned income allowances by non-gender based fixed amount tax allowances which would be partially transferable—to the extent of two-thirds—between husband and wife, assuming (i) independent taxation and (ii) joint taxation of investment incomes for married couples.
§ Mr. Ridley[pursuant to his reply, 17 January 1983, c. 21]: It is estimated that, at 1982–83 income levels, the approximate levels of allowance required would be:
- (1) £1,750, assuming independent taxation (whereby wife's investment income and Category B pension are taxed as her own);
183 - (ii) £1,800, on the basis that wife's investment income and Category B pension are aggregated with the husband's income for tax purposes.
These estimates are approximate, because of the limited information on the split of married couples' investment income between husband and wife and, more generally, the difficulties of estimating tax yields under a system of transferable allowances. In particular, a system under which reliefs and allowances are limited to the basic rate in conjunction wth transferable allowances, cannot be costed directly; but a broad adjustment to the estimates has been made to allow for the effects of this limitation.