§ Mr. LawsTo ask the Chancellor of the Exchequer (1) what his estimate is of the revenue yield from860W abolishing capital gains tax and taxing capital gains at the marginal rate of income tax; and if he will make a statement; [130140]
what his latest estimate is of the cost of capital gains tax exemptions, excluding that relating to the disposal of the only or main residence, broken down in cash terms by each income decile; [130550]
(3) what his estimate is of the effect on the revenue yield from capital gains tax of simultaneously abolishing the (a) taper relief, (b) annual exempt amount and (c) gains accrued but unrealised at death, in each year from 2003–04 to 2005–06, broken down to show the cash effects on each income decile; and if he will make a statement. [130551]
§ Dawn PrimaroloEstimates of the cost, on an accrual basis, of capital gains tax exemptions and reliefs for 2001–02 and 2002–03 are published in Table A3.1 in the Budget Report 2003.
There are no estimates of the revenue yield from abolishing capital gains tax and taxing capital gains at the marginal rate of tax, except at a disproportionate cost.
There are no estimates on the revenue yield of a simultaneous abolition of taper relief, annual exempt amount and gains accrued but unrealised at death, except at a disproportionate cost. The total cost of these reliefs and exceptions in Table A3.1, referred to above, does not take account of any interaction between the abolition of one relief or exemption and subsequent changes in the cost of the others.
Figures for later years are not available; breakdown of reliefs/exemptions by income decile is only available at a disproportionate cost.
§ Mr. LawsTo ask the Chancellor of the Exchequer (1) what his estimate is of the revenue yield of(a) abolishing the capital gains tax annual exempt amount for (i) individuals and (ii) trustees and (b) reducing to £2,000 per annum the capital gains tax annual exempt amount for (A) individuals and (B) trustees; and if he will make a statement; [130149]
(2) what his estimate is of the revenue which would be raised by reducing the capital gains tax exempt amount to the level of the personal income tax allowance for (a) 2003–04 and (b) 2004–05; and if he will make a statement. [130233]
§ Dawn PrimaroloThe total estimated yield on an accruals basis from abolishing capital gains tax annual exempt amount for individuals and trusts in 2001–02 and 2002–03 is published in Table A3.1 in the Budget Report 2003. They exclude any behavioural response to the tax change.
The total estimated yield on an accruals basis from reducing individuals capital gains tax annual exempt amount to £2,000 or setting it to the personal income tax allowance in 2003–04 and 2004–05 is set out in the following table. 861W
Yield £ millions 2003–04 2004–05 Individuals AEA set to £2,000 per annum (Trust AEA = £1,000) 190 240 Individuals AEA set to personals Income Tax Allowance (Trust AEA = half the personal Allowance) 70 90 The figures are consistent with the assumptions made in the Budget 2003 on future asset prices, and take into account the likely taxpayer behavioural responses to the tax change. The Annual Exempt Amount for Trusts is assumed to be half that of individuals.
The model used to cost CGT changes of this type links the AEA for individuals and trusts according to current practice. It is not possible to separately model the Annual Exempt Amount for individuals and trusts.
§ Mr. LawsTo ask the Chancellor of the Exchequer what action he is taking to prevent avoidance activities in relation to capital gains tax; and if he will make a statement. [130555]
§ Dawn PrimaroloThis Government are committed to tackling avoidance of tax and have introduced a number of anti-avoidance measures relating to capital gains tax. We continue to monitor the position and shall not hesitate to introduce further legislation to protect the tax base when it is necessary to do so.