§ Mr. Matthew BanksTo ask the Chancellor of the Exchequer if he will make a statement on Government debt management. [26624]
§ Mr. NelsonYes. The current tax rules for gilts and bonds inhibit the development of new types of gilts and bonds and make the introduction of an official gilt strips market impossible. They also offer scope for tax avoidance and hence necessitate lengthy and complex anti-avoidance legislation.
The Inland Revenue has therefore today published a consultative document outlining a much simpler system, under which all returns on gilts and bonds would be taxed as income. This would also provide a consistent framework for the taxation of new types of bonds and gilts.
Reform on these lines is a necessary precondition for the introduction of an official gilt strips market. The Bank of England is today publishing a consultative document on the introduction of a strips market.
The consultative period will end on 30 June and the Government will make an announcement shortly afterwards on how they intend to proceed.
Copies of both consultative documents have been placed in the Libraries of both Houses.