Capital Taxation

HC Deb 15 March 1991 vol 187 cc700-1W

Mr. Nicholas Brown

To ask the Chancellor of the Exchequer what is the reduction in annual liability to(a) capital gains tax and (b) capital transfer tax in 1990–91 and 1991–92 as against the 1978–79 indexed regime, specifying in each case the total and average reduction per taxpayer and the number of taxpayers in each year.

Mr. Maude

[holding answer 25 February 1991]: I regret the delay in replying. Latest available estimates for capital transfer/inheritance tax for 1990–91 and for 1991–92, based on the 1990–91 regime with statutory indexation, are as follows:

	Estimate
Reduction, compared with indexed 1978–79 regime in:
Total liability (£ million):
1990–91	690
1991–92	730
Average liability1 (£):
1990–91	9,600
1991–92	10,300
Taxpayer numbers (thousands) Indexed regime:
1990.91	72
1991.92	70

	Estimate
Present regime:
1990–91	23
1991–92	22
1 The reduction in the average liability is calculated using estimated numbers of taxpayers under the indexed 1978–79 regime.

These estimates are based on the estimated value of taxable estates passing on death in 1990–91 and 1991–92 under existing rules and make no allowance for any impact which the indexed 1978–79 tax rate would have on the level of taxable estates.

The methodology used to compare the indexed 1978–79 capitals gains tax regime with the current regime has been examined. A number of major modelling assumptions have to be made for this comparison since, in 1978–79, tax was charged on nominal gains with gains accruing prior to 6 April 1965 being ignored whereas, under the current regime, the charge applies to gains after allowing for indexation and ignoring gains accruing prior to 31 March 1982. I regret that the conclusion reached is that it is not possible to provide sufficiently reliable estimates of the difference between the two regimes.

Latest available estimates of taxpayer numbers for capital gains tax for the present regime, excluding gains realised by companies and included in assessments to corporation tax, are:

	Thousands
1990–91 liabilities	110
1991–92 liabilities	95