§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what is the number of individuals whose after-tax income will be reduced by the forthcoming restriction of tax relief on mortgage interest at source from 20 to 15 per cent. [17180]
§ Sir George Young[holding answer 30 March 1995]: About 10.1 million single people or married couples will benefit from mortgage interest relief in 1995–96, all of whom will be affected by the change in the rate of relief.
§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what was the annual value of mortgage interest relief at source to(a) the average standard rate taxpayer and (b) the average higher rate taxpayer, with (i) a £30,000 mortgage, (ii) in a £60,000 mortgage and (iii) a £100,000 mortgage (1) in 1979–80, (2) in 1993–94, (3) as projected for 1994–95 and (4) as estimated for 1995–96 expressed in 1994 prices. [16812]
§ Sir George Young[holding answer 29 March 1995]: Information is given in the following table.
Much of the reduction in the value of the relief is due to lower interest rates.
Annual value of mortgage interest relief (£) 11979–80 21993–94 31994–95 41995–96 (in 1994–95) prices) Basic rate taxpayer with: £30,00 mortgage 970 590 470 350 £60,000 mortgage 970 590 470 350 £100,000 mortgage 970 590 470 350 Higher rate taxpayer with: £30,000 mortgage 1,450 590 470 350 £60,000 mortgage 1,450 590 470 350 £100,000 mortgage 1,450 590 470 350 1 Average higher rate taxpayer assumed to obtain relief at 45 per cent. Average building society interest rate was 12.9 per cent. 2 Average building society interest rate was 7.9 per cent. 3 Interest rate of 7.8 per cent. used. This is based on the average building society interest rates from April 1994 to January 1995, and then assuming, by convention, no changes from the current interest rate of 8.1 per cent. Relief at 20 per cent. 4 Assumes, by convention, no changes from current interest rate of 8.1 per cent. Relief at 15 per cent.