HC Deb 07 May 1992 vol 207 cc1-2W
Mr. Burns

To ask the Chancellor of the Exchequer if he has any proposals affecting the tax rules for building societies.

Mr. Dorrell

A question has been raised in current judicial review proceedings, not yet heard in the courts, about the validity of the composite rate tax—CRT—charge for 1986–87 to 1989–90 on interest paid to investors. It is suggested that legislation in 1991, in connection with the transition to new arrangements for CRT in 1985–86, has retrospectively changed the basis on which the CRT rates should have been set for the four subsequent years. Around £15 billion has been collected by reference to those rates.

The Government's view is that the composite rates for the years concerned are valid and I am clear that they were set in accordance with Parliament's intentions in passing the 1991 and earlier legislation. I do not believe, however, that it is acceptable for the Exchequer's claim to the amounts involved to be in doubt, possibly for a period of years. 1 therefore propose to bring forward legislation in the forthcoming Finance Bill to confirm the composite rates for the years 1986–87 to 1989–90 set in the relevant Treasury orders. This is subject to the House approving the necessary Ways and Means resolution which will be among those appearing in the Order Paper on 8 May.

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