Taper Relief (Hansard, 17 December 2001)

§ Matthew Taylor
To ask the Chancellor of the Exchequer what will be the cost of taper relief for financial years(a) 2002–03 and (b) 2003–04. [22192]

§ Dawn Primarolo
The costs of capital gains tax taper relief for 2000–01 and 2001–02 are given in the Tax Ready Reckoner and Tax Reliefs, which was published on 27 November 2001. Estimates for future years are highly dependent on assumed growth in asset values.

§ Matthew Taylor
To ask the Chancellor of the Exchequer what assessment he has made of the reasons for the change in the cost of taper relief for financial years(a) 2000–01 and (b) 2001–02 between November 2000 and November 2001 tax ready reckoners; and if he will make a statement.

§ Dawn Primarolo
For 1999–2000, taper relief was only available in respect of disposals of business assets. For long held assets, the proportion chargeable was 85 per cent.
For 2000–01, taper relief was also available for non-business assets. The proportion chargeable was 95 per cent. for long held non-business assets and 75 per cent. for long held business assets.
For 2001–02, the proportion chargeable reduces to 50 per cent. for long held business assets and 90 per cent. for long held non-business assets.
The change in cost of taper relief between years reflects the progressive maturity of these taper relief structures as well as such factors as asset values, volumes of disposals and tax rates and allowances.
The change, between November 2000 and November 2001, in the estimates of the cost of taper relief for 2000–01, reflects changes in the underlying estimate of CGT liability for that year (liabilities for 2000–01 are mostly paid in 2001–02). This is due to new information on asset prices and disposal volumes through 2000–01 and higher than expected CGT receipts in 2000–01.