§ Mr. LeeTo ask the Chancellor of the Exchequer what would be the estimated loss of revenue if the 40 per cent. rate for capital gains tax were lowered to 25 per cent.
§ Mr. LilleyIt is estimated that the cost of charging all taxable capital gains realised by individuals in 1990–91 at 133W 25 per cent. would be about £350 million. The estimate allows for some increase in disposals in response to the reduction in the effective rate of the tax but does not allow for possible short-term effects, nor for possible substitution by higher rate taxpayers of gains for income. No allowance has been made for any change in the treatment of capital gains of companies which are taxed within corporation tax.