§ Mr. CousinsTo ask the Chancellor of the Exchequer if lone parents will be allowed to hold ISAs in excess of £50,000 in the event of transfer of savings or resources from an absent parent as part of a divorce or separation settlement. [22972]
§ Mr. Geoffrey RobinsonNo such proposal is included in the consultative document on the individual savings account (ISA) published on 2 December.
§ Mr. FallonTo ask the Chancellor of the Exchequer if the holder of the new individual savings account who invests up to the proposed £50,000 limit and whose investment increases beyond the limit will be able to withdraw the excess and re-invest it irrespective of the limit on annual contributions. [26235]
§ Mr. Geoffrey RobinsonThe £50,000 overall limit for the ISA is a limit on contributions. An ISA will be able to grow to over £50,000 and full tax relief will be given on it. As proposed, any amounts withdrawn from the ISA will be able to be re-invested subject to the annual and overall investment limits.
§ Mr. FallonTo ask the Chancellor of the Exchequer if he will estimate the revenue implications if(a) 50 per cent. and (b) 75 per cent. of those holding more than £50,000 in TESSA and PEP investments transferred into the new individual savings account transferred the excess into tax-favoured national savings products. [26232]
§ Mr. Geoffrey RobinsonThe cost would depend on the amounts individuals held above the proposed £50,000 overall investment limit for individual savings accounts, and the extent to which they were able to take advantage of the different limits for the various tax favoured national savings products.
§ Dr. CableTo ask the Chancellor of the Exchequer what steps he has taken to establish the level of savings providers' proposed administrative and selling charges to savers of up to(a) £100, (b) £250 and (c) £1,000 per annum under the ISA scheme. [25226]
§ Mr. Geoffrey RobinsonCharges will depend on the final form of the scheme. In designing the ISA we have sought to replicate so far as possible existing PEP and TESSA procedures, and we intend to keep costs to providers as small as possible.
§ Dr. CableTo ask the Chancellor of the Exchequer what plans he has to recruit additional staff in the Inland Revenue to administer the ISA scheme. [25231]
§ Mr. Geoffrey RobinsonThe number of staff required by the Inland Revenue will depend on the final form of the scheme.
§ Mrs. LaitTo ask the Chancellor of the Exchequer how much tax the Treasury expects to forgo annually with the introduction of ISAs and what tax has been forgone on an annual basis since the introduction of PEPs and TESSAs. [22570]
§ Mr. Geoffrey RobinsonThe Government are planning to spend at least as much on the introduction of individual savings accounts as on PEPs and TESSAs, and have budgeted accordingly. The estimated annual costs of PEPs and TESSAs since their introducion are as follows.572W
£ million Year PEPs1 TESSAs Total 1986–87 Negligible — Negligible 1987–88 5 — 5 1988–89 15 — 15 1989–90 20 — 20 1990–91 65 25 90 1991–92 120 200 320 1992–93 170 250 420 1993–94 230 300 530 1994–95 325 350 675 1995–96 450 450 900 1996–972 600 350 950 1997–982 800 450 1,250 1 Including the CGT cost of capital gains within personal equity plans. 2 Provisional.