Clause 45 - Taper relief: holding period for business assets
Finance Bill
12:30 pm
Mr John Burnett (Torridge and West Devon, Liberal Democrat)
I endorse the point made by Conservative Members about people owning disqualifying business assets pre-April 2000. It is preposterous that they must wait until April 2010 to receive full capital gains tax relief, whereas those who acquired an asset after the change in rules receive that relief significantly earlier.
During the Finance Bill a year ago, the right hon. Member for Fylde and I took that up with the Economic Secretary, but we were never given a satisfactory explanation for that preposterous state of affairs. I am indebted to the Chartered Institute of Taxation for its remarkably lucid parable about Fred and Jim, who both worked for Successful plc. Because poor old Fred held shares prior to April 2000, he would qualify for the 10 per cent. rate of tax only if he were to sell them in April 2010; Jim would get the tax advantage because he held shares after April 2000. That is unsatisfactory because it will not reward individuals who have worked hard, and risked their assets and money, for longer. Those people need rewarding. I look forward to the Economic Secretary's endeavour to defend what many people consider to be indefensible.