HC Deb 14 April 1994 vol 241 cc278-9W
Mr. Maxton

To ask the Chancellor of the Exchequer what is the cost of tax relief on investment income for(a) occupational pensions, (b) personal pensions and (c) other exempt institutions, differentiating between that part of the relief due to relief from tax on dividends and that part of the relief due to relief from tax on capital gains.

Mr. Dorrell

The available estimates for 1993–94 are as follows:

  1. (a) The total cost of tax relief on investment income of occupational pension schemes is estimated to be about £5.1 billion. This includes £2 billion of tax credits issued with dividends of United Kingdom companies for occupational pensions funds.
  2. (b) It is not possible to provide a total for relief on investment income in respect of personal pension schemes, though the total of tax credits issued with dividends is £0.75 billion for insurance companies on account of their pension funds. It is not possible to seperate this estimate between personal pensions and other pension business.
  3. (c) Tax credits on dividends to charities total about £200 million. About £60 million of tax repayments for income received under deduction of tax were made to charities.

Lack of information on the length of time that pension funds hold various types of assets means that a reliable estimate of the cost of tax relief on capital gains of funds cannot be made.