HC Deb 12 April 1994 vol 241 cc39-41W
Mr. Nicholas Brown

To ask the Chancellor of the Exchequer what were the net receipts for inheritance tax in each year since 1986.

Mr. Nelson

The net receipts for inheritance tax in each financial year since 1986–87 are:

£ million
1986–87 995
1987–88 1,078
1988–89 1,071
1989–90 1,232
1990–91 1,262
1991–92 1,299
1992–93 1,211
11993–94 1,290
1 Provisional estimate.

The figures include receipts from capital transfer tax and estate duty.

Mr. Nicholas Brown

To ask the Chancellor of the Exchequer (1) what is the estimated cost to the Exchequer in(a) 1992–93 and (b) 1993–94 of exempting most family businesses from inheritance tax;

(2) if he will estimate the value of inheritance tax revenues forgone by the Inland Revenue through exemptions and reliefs for (a) business property, (b) agricultural land, (c) woodlands, (d) works of art and (e) historic houses.

Mr. Nelson

The estimated costs of granting relief against inheritance tax for transfers in 1993–94 for the various categories are:

£ million1
(a) Business property 55
(b) Agricultural land 70
(c) Woodlands negligible
1 Estimates rounded to nearest £5 million.

Separate estimates for relief for family business are not available: such relief is contained within the estimates for business and agricultural reliefs.

The estimated annual cost of exemptions and reliefs from inheritance tax for heritage property shows significant fluctuations from year to year. Over the past decade the average annual cost has been:

£ million1
(d) Works of Art 80
(e) Land and Buildings 10
1Estimates rounded to nearest £5 million.

Mr. Nicholas Brown

To ask the Chancellor of the Exchequer if he will estimate the value of inheritance tax revenues lost by the Exchequer through the use of(a) lifetime gifts and (b) offshore trusts.

Mr. Nelson

The information requested on these transfers is not kept because these transfers fall outside the inheritance tax charge.

Mr. Nicholas Brown

To ask the Chancellor of the Exchequer what percentage of estates in the United Kingdom are liable to inheritance tax.

Mr. Nelson

It is estimated that of estates passing on death in the United Kingdom in 1993–94, about 3 per cent. are liable to inheritance tax.

Mr. Nicholas Brown

To ask the Chancellor of the Exchequer if he will estimate the value of inheritance tax revenues lost by the Inland Revenue each year through the creation of discretionary trusts made during a donor's lifetime.

Mr. Nelson

Lifetime transfers into most discretionary trusts are subject to a charge to inheritance tax at half death rates, and a top-up charge should the donor die within seven years of such transfers. Most discretionary trusts are also subject to a further charge to inheritance tax every 10 years. The purpose of this regime is to ensure that the tax payable on property passing into discretionary trusts is broadly equivalent to the tax payable if it had passed on death. There is no evidence to suggest that, overall, any inheritance tax is lost through the creation of discretionary trusts.

Mr. Nicholas Brown

To ask the Chancellor of the Exchequer what is the estimated cost to the Exchequer in(a) 1992–93 and (b) 1993–94 of raising the relief from inheritance tax from 30 per cent. to 50 per cent. for (i) shareholdings of 25 per cent. or less in unquoted companies, (ii) agricultural landlords, (iii) smaller shareholdings in unlisted securities market companies and (iv) controlling shareholdings in quoted companies.

Mr. Nelson

Under the Finance (No. 2) Act 1992, business assets and farmland which previously qualified for 30 per cent. relief from inheritance tax were granted 50 per cent. relief. Relief at 50 per cent. was also extended to holdings of 25 per cent. or less without control in unlisted securities market companies which previously did not qualify for relief. The combined costs of these changes are about £5 million in a full year. Separate costs for the different categories in terms of receipts in 1992–93 and 1993–94 are all negligible. No change was made to the 50 per cent. relief received by controlling holdings in fully quoted companies.

Mr. Nicholas Brown

To ask the Chancellor of the Exchequer if he will estimate the total value of all property that changes ownership in one year as a result of the death of the previous owner; and what proportion of this is subject to inheritance tax.

Mr. Nelson

For estates passing on death in 1989–90, the most recent year for which figures are available, the total value of property that changed ownership as a result of the death of the previous owner is estimated to be in the region of £25 to £30 billion. Inheritance tax was charged on about £3 billion of this value.

Mr. Nicholas Brown

To ask the Chancellor of the Exchequer if he will estimate the cost to the Exchequer in(a) 1992–93, (b) 1993–94 and (c) 1994–95 of raising the threshold for inheritance tax to £150,000.

Mr. Nelson

The estimated costs to the Exchequer of raising the threshold for inheritance tax to £150,000 in 1992–93, measured against an indexed base, are:

Year £ million
1992–93 10
1993–94 15
1994–95 20

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