Schedule 4
Finance Bill
4:30 pm
Jane Kennedy (Financial Secretary, HM Treasury; Liverpool, Wavertree, Labour)
That is what I understood to be the case, and I agree with the analysis set out by the hon. Gentleman.
Nevertheless, amendment No. 46 would apply the provisions under schedule 4 as if an unlimited spouse relief has been in place for deaths occurring under the estate duty regime. Our analysis suggests that it does not achieve that effect, because a construction based on treating the first death as if part of the first spouse’s estate was not charged to a state duty does not change the way in which schedule 4 determines how much unused allowance is available. In any event, the fundamental point is that the Bill takes a consistent approach for all cases, and whatever allowance was unused on the first death may be transferred for use on the second death.
In drawing up this measure, we deliberately opened up entitlement so that unused nil-rate band can be transferred regardless of when the first death occurred. However, in the interest of keeping the rules as straightforward as possible and recognising that the information available may be limited, we chose to stop short of attempting to reassess deaths that occurred over 30 years ago as if a different set of rules applied at that time. The amount of time that has passed and the complexity of some families’ arrangements means that taking an alternative approach is difficult both to conceive and to operate. I appreciate that both the hon. Member for South-West Hertfordshire and the hon. Member for South-East Cornwall cited difficult cases, but it is hard to see how we could reopen old cases old in a way that would enable consistent and fair handling to be delivered. We therefore continue to believe that the approach taken in the Bill strikes a pragmatic balance between making an allowance for deaths that occurred before the measure was announced and keeping the rules simple and practicable. [Interruption.]