Provisions Against Avoidance

Orders of the Day — Budget Statement – in the House of Commons at 12:00 am on 3 April 1963.

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I might mention here that I have two proposals designed to protect the Revenue, both of them arising out of recent decisions of the courts. First, Estate Duty. Gifts made in consideration of marriage are exempt from the normal five-year rule. There is no doubt that this exemption was intended to apply only to gifts made to persons within the marriage consideration, that is, the parties to the marriage and their issue; but it now appears that other members of the family can be benefited at the same time without the exemption being forfeited. I propose to limit the relief to gifts made to persons within the marriage consideration. The same point arises in relation to Stamp Duty. The second proposal relates to the ad valorem Stamp Duty on mortgages and other securities. An easy way has been discovered of avoiding this duty, and I propose to introduce legislation to block it. Neither of these proposals will be retrospective.

The cost of all the minor tax changes I have mentioned will be £10 million in 1963–64 and £26 million in a full year. These figures include the effect of abolishing the Television Licence Excise Duty.