§ Mr. Nigel GriffithsTo ask the Chancellor of the Exchequer what would be the costs in a full year of increasing the threshold for capital gains tax by(a) £1,000, (b) £2,000, (c) £3,000, (d) £4,000 and (e) £6,000; and how many people would be taken out of capital gains tax as a result of each of these measures. [39090]
§ Mr. JackThe estimated full-year costs of increasing the indexed capital gains tax threshold by the specified amounts, and the associated reductions in taxpayer numbers, are given in the following table:
867W
Raise CGT threshold by Full year cost(1996–97)£ million Full year cost(medium term)£ million £1,000 10 20 £2,000 20 40 £3,000 30 60 £4,000 50 80 £6,000 70 110
Raise CGT threshold by Number of taxpayers taken out of tax £1,000 around 10,000 £2,000 around 20,000 £3,000 25,000–30,000 £4,000 30,000–40,000 £6,000 40,000–50,000 The estimates given take account of the likely effect of changes on the volume of disposals in a full year, caused by changes in taxpayer behaviour.
§ Mr. GriffithsTo ask the Chancellor of the Exchequer if he will estimate the likely revenue consequences in a full year due to(a) straightforward revenue loss and (b) behavioural effects of the introduction of a maximum rate of capital gains tax of 25 per cent. [39155]
§ Mr. JackThe full year costs of introducing a maximum rate of capital gains tax of 25 per cent. are shown in the table. Estimates are given before and after taking into account the likely effect of changes on the volume of disposals in a full year, caused by changes in taxpayers' behaviour.
Introducing a maximum CGT rate of 25 per cent. Full year cost(1996–97)£ million Full year cost(medium term)£ million Without behavioural effects 450 600 With behavioural effects 300 450 The figures exclude gains made by companies which are charged to corporation tax.