Gilt-edged Stock (Hansard, 27 June 1995)

§ Mr. Malcolm Bruce
To ask the Chancellor of the Exchequer if he will consider extending the consultation period for the recent proposals to change the taxation of gilt-edged stock. [31248]

§ Sir George Young
We considered the timetable for consultation very carefully before announcing the proposals in the Revenue's consultative document, as my foreword makes clear. We concluded that the period proposed struck the best available balance between the need to allow scope for consultation and to minimise uncertainly. That remains our view.

§ Mr. Bruce
To ask the Chancellor of the Exchequer what plans he has to bring proposals to the House in relation to the reform of taxation of gilt-edged stock. [31247]

§ Sir George Young
My hon. Friend the Minister of State announced the publication of an Inland Revenue consultative document in reply to the hon. Member for Southport (Mr. Banks) on 25 May 1995Official Report, column 712. Copies were placed in the Library of the House. We will announce our decision whether to proceed shortly after the period for consultation closes at the end of this month. Any consequent legislative proposals will come before the House in the normal way.

§ Mr. Bruce
To ask the Chancellor of the Exchequer what steps he will take to protect personal investors in gilt-edged stocks from the retrospective tax consequences of the recent proposals to reform the taxation of gilt-edged stock; and if he will make a statement. [31249]

§ Sir George Young
The proposals would not have retrospective effect: they would apply only to gains or losses building up in the future.
The consultative document on the possible reform of the taxation of gilts and bonds suggests that there should be a sizeable threshold for private investors below which only interest would be taxable. It seeks views on the size and form of this threshold. The Government envisage that the threshold would be set at a level high enough to ensure that the overwhelming majority of personal investors were below it.
551W
Most current personal holders of gilts would, if anything, be likely to benefit from the reform: the accrued income scheme which taxes accrued interest on disposals of gilts, would be abolished; and in addition, for those above the threshold, losses on disposals of gilts would attract tax relief. We will, though, be carefully considering representations on how the transition to the new regime might best be handled if the reform goes ahead.