Clause 13 - Relief from income tax and capital gains tax
Child Trust Funds Bill
9:45 am
Mr David Laws (Yeovil, Liberal Democrat)
I am grateful to the Minister for her comments. I appreciate that the Exchequer has made a low estimate of the cost of this particular measure. However, such estimates have a habit of going astray
over time. May I gently remind the Minister of the estimates that the Treasury made just a few years ago for the costs of the film industry tax relief? That was supposed to cost £30 million or £40 million, but within a very short period the estimate had risen to something like £400 million a year.
The Minister said that many people would not wish to take up the tax avoidance opportunity because the beneficiaries would ultimately be children rather than themselves. However, there are many individuals who, precisely because they have a high income and large tax liabilities, want to minimise those liabilities in any way they can, including giving money to children. If that minimises their tax liability, it reduces the amount of money going to the Exchequer and the amount available for more worthwhile schemes.
I will not press the amendment to a Division, but I hope that the Minister will keep the issue under review. In the Select Committee, the Minister told the hon. Member for Newcastle upon Tyne, Central that she would go away and consider the issue in the general context of when the income tax settlements legislation should apply.
I hope that the Minister will confirm that the annual Treasury booklet, which shows the cost of tax relief, will include an estimate of the cost of this relief. I hope also that, through that mechanism, the annual Budget statements and the pre-Budget reports, we can keep an eye on whether the tax relief grows in line with the Treasury's estimates. I hope that if it does not we will have the opportunity to intervene. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 13 ordered to stand part of the Bill.
Clause 14 ordered to stand part of the Bill.