Clause 84 - Charge to income tax by reference to enjoyment of property previously owned
Finance Bill
11:00 am
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
Forgive my trying to put the matter delicately, but it is not possible to give an annual yield. That depends on the age of people when they enter the scheme, and how long they live, which are unpredictable factors. We are reliably informed by the market that 30,000 schemes have developed up to the December period. Billions of pounds of assets are wrapped up in those schemes, so over time hundreds of millions of pounds of inheritance tax will not be paid, and that is a substantial loss over a long period. Indeed, the figure could rise into billions of pounds.
The question posed for the Government about the clause concerns the challenge whereby gifts with reservations are being negated and the desire to ensure that wealth is appropriately taxed as the tax system requires it.