§ Mr. Gregoryasked the Chancellor of the Exchequer, what is his estimate of the cost of extending mortgage interest tax relief to (a) £35,000 and (b) £40,000 under (i) the present tax arrangements and (ii) if the relief was limited to standard rate of income tax.
§ Mr. Moore[pursuant to his reply, 21 March 1985, c. 603.]: Assuming no consequential changes in the distribution of mortgages by amount outstanding, the direct revenue costs of the extra relief in a full year at 1985–86 levels of income and interest rates would be approximately as follows:
£ million Relief allowed Limit qualifying for relief at taxpayers marginal rate at basic rate only £35,000 100 80 £40,000 125 100 In the cases where relief was restricted to the basic rate, there would also be a yield of some £280 million, in respect of interest qualifying under the present limit, which would offset the costs shown in the final column.