§ Mr. Gerald HowarthTo ask the Chancellor of the Exchequer what is the revenue cost assumed for 1991–92 in respect of individuals' capital gains tax allowance.
§ Mr. MaudeThe total revenue cost of the capital gains tax annual exempt amount for individuals and trusts is estimated to be about £350 million at 1991–92 levels. This estimate does not allow for the effect on yield of the behavioural changes which would occur if the annual exempt amount were removed.
§ Mr. Gerald HowarthTo ask the Chancellor of the Exchequer (1) what would be the capital gains tax yield for the latest available year if all equity transactions where a gain was taken within 12 months were taxed at 40 per cent;
(2) what amount of capital gains tax was paid reflecting holdings of less than one year in (a) 1988–89, (b) 1989–90 and (c) 1990–91.
§ Mr. MaudeInformation is available about the distribution, by length of period of ownership of assets, for554W net chargeable gains realised in 1987–88. A detailed analysis is provided in table 11.7 of "Inland Revenue Statistics 1990". This analysis suggests that about 5 per cent. of net chargeable gains for 1987–88 were attributable to assets owned for less than one year. The figures exclude gains realised by companies which are chargeable to corporation tax.
If capital gains tax on equities were restricted to disposals of equities within one year of acquisition with gains on equities held for more than one year exempted from tax, it is likely that, after taking account of behavioural effects, the total capital gains tax yeild from equities would be small.
§ Mr. Gerald HowarthTo ask the Chancellor of the Exchequer what is the revenue cost for 1990–91 of the capital gains tax indexation provisions.
§ Mr. MaudeI regret that it is not possible to provide a sufficiently reliable estimate of the cost of indexation relief.