HC Deb 25 July 1989 vol 157 cc634-5W
Mr. Austin Mitchell

To ask the Chancellor of the Exchequer what information he has on the rules for the taxation of investment-linked and other life assurance in(a) Germany and (b) Luxembourg for life offices and policy holders, respectively.

Mr. Norman Lamont

In both countries life offices pay tax broadly by reference to their trading profits. In Germany policy holders may also pay tax on policy benefits received, depending on the terms of the policy and its duration. So far as I am aware, investment-linked life assurance comparable. to that in the United Kingdom is not usual in either country: I am aware of no special tax provision for it.

Mr. Austin Mitchell

To ask the Chancellor of the Exchequer what practical limitations have been or are likely to be imposed by membership of the EEC on the Government's freedom to increase the tax take from the life assurance business, including pension and annuity business.

Mr. Norman Lamont

The practical development of a single internal EC market for life assurance is still at an early stage but in consultation with the industry the Government will be keeping the position under review. The decision this year to reform the existing tax regime for life assurance instead of adopting a more radical option will undoubtedly provide stability for the run-up to 1992. But allowing for freedom of services in the EC was only one of several objectives of the reform. As my right hon. Friend said in his Budget speech, above all the effect of the changes will be to provide a more efficient and equitable tax regime for this most important industry.