§ Mr. Timothy Smithasked the Chancellor of the Exchequer what would be the revenue cost of allowing indexation of the original cost of assets held at April 1981, of their March 1965 value if later, for the purposes of computing capital gains tax.
§ Mr. RidleyIf indexation applied to gains accruing before March 1982, it is estimated that the cost in 1983–84 would be about £170 million. This cost is additional to that arising from the indexation provisions introduced last year. There would be a further substantial reduction in yield in subsequent years, the precise effect in each year depending on the rate of disposal of the relevant assets.
§ Mr. Timothy Smithasked the Chancellor of the Exchequer what would be the revenue cost of the following changes in capital gains tax business retirement relief: (a) a reduction in the eligible age from 60 to 55 years and abolition of tapering, (b) an increase in the maximum relief from £50,000 to £75,000 with proportionate changes in tapering, and (c) (a) combined with an increase in the maximum relief from £50,000 to £75,000.
§ Mr. Ridley(b) would cost £2 million in a full year at 1982–83 capital values. I regret that insufficient information is available with which to estimate the cost of (a) and (c).