(Except clauses 7, 8, 9, 11, 14, 16, 20 and 92) - Schedule 27
Finance Bill
1:00 pm
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
I welcome you back to the chair for this afternoon’s sitting, Mr. Hood.
I was talking about the Poles referred to by my hon. Friend the Member for Hammersmith and Fulham in the debate last year on the residence and domicile rules. I was pointing out to the Minister that there was apparently a degree of confusion about what the limit would be in what is introduced by paragraph 3 of the schedule. The explanatory notes state:
“Paragraph 3 amends section 809D(1)...which provides that an individual unremitted foreign income and gains of less than £2,000 in a tax year does not need to file a self-assessment tax return”
Paragraph 3 (3)(1A) of the schedule states that
“the individual is not domiciled in the United Kingdom in that year and conditions A to F in section 828B are met.”
In clause 52, condition B in proposed new section 828B refers to the matter of £10,000. There is a mismatch somewhere between the explanatory notes and the Bill as to what the cut-off level would be, so I should be grateful for some clarification. I shall have a little more to say about the £10,000 when we come to the next clause.
The other issue that is resolved, in part, in the schedule, is that of the trailing spouse. That was debated last year. The Government helpfully made a positive move by introducing a de minimis limit of UK source income of £100—the hon. Member for Taunton has tabled an amendment to clause 52 about that. My only concern about the issue is that the limit may be insufficiently generous, because it would give rise to taxable income of £20. Do we want a trailing spouse to go through that process simply for £20-worth of tax? Is there not a higher, more pragmatic, limit? When we debated the issue last year the Minister’s predecessor, the right hon. Member for Liverpool, Wavertree (Jane Kennedy) was very much against increasing limits. Is the Treasury much more interested in increasing limits this year? The change from £2,000 to £10,000 is one increase. Perhaps the Government should think more carefully about imposing too high a burden in respect of a relatively small amount.
The other issue that had a great deal of debate last year, both in the run-up to the Committee stage of the Finance Bill and the Bill itself, was remittances of personal property. This year the exemption has been extended so that it applies regardless of the source of income used to purchase a property. That is a welcome move by the Government, which takes account of some of the criticism made last year about the unworkability—if that is a word in the dictionary—of the reforms and has taken things further. However, one of the comments that has been made is that the exemption could have gone a little bit further than the Government have conceded so far.
The exemption does not apply when the assets cease to be personal property. That is entirely reasonable when the personal property has been sold, and I can understand that. There is concern that the exemption should be extended to include circumstances when the property has been lost or stolen. That would be a welcome relaxation of the rules.
We are grateful that the Government have made some progress in responding to the concerns we raised last year, but I wonder if the Minister could clarify the three issues that I have raised: the interaction between the £2,000 and the £10,000 limits; whether there could be a more generous amount for the so-called trailing spouse provision; and whether the exemption for personal property could be extended to include property that is either lost or stolen.