(except clauses 4, 5, 20, 28, 57 to 77, 86, 111 and 282 to 289, and schedules 1, 3, 11, 12, 21 and 37 to 39) - Clause 84 - Charge to income tax by reference to enjoyment of property previously owned
Finance Bill
2:30 pm
Mr Howard Flight (Shadow Chief Secretary To the Treasury, Economic Affairs; Arundel and South Downs, Conservative)
I think that I made it clear before we retired for lunch that we object to the principle of retrospective taxation. I am now trying to spell out why the provisions, which the Paymaster General explained are aimed at the better-off, are a cause for worry to all sorts of ordinary citizens. There are two separate aspects, but I made it clear up front that we object to the retrospective nature of the provisions. If this is a hole that needs to be plugged, it should properly be plugged by amending the IHT legislation rather than by the retrospective impact of what is being proposed.
A general and worthwhile point is that the potential impact of so much of what gets done is not thought through. I am about to speak about the other end of the scale—historic homes—but I thought it appropriate to mention that it was the Low Incomes Tax Reform Group that voiced the strongest objections. As the Paymaster General will say, the provisions were not intended to impact on those on lower incomes at all, but they may do and that is a concern.
The arrangements present major problems for historic houses and their contents, where, for bona fide reasons, the owners cannot comply with the more demanding standards to qualify for conditional exemption. The great majority of the electorate value our historic homes and their heritage and are, by and large, supportive of many families for whom it is quite a financial struggle to maintain them.
There are more than 1,800 recorded privately owned historic homes remaining in Britain. Some 350 are open to the public regularly and attract 15 million visitors each year. A further 200 provide some degree of public access less regularly. The Historic Houses Association recently conducted a survey that found that of the 350 major houses open to the public, 45 will be affected by the proposals. The largest recorded tax change relates to chattels and in quantum is in the order of £1 million per annum.