Schedule 15 — Charge to income tax on benefits received by former owner of property

Part of Clause 5 — Rates – in the House of Commons at 4:00 pm on 7 July 2004.

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Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury) 4:00, 7 July 2004

Perhaps the hon. Gentleman will allow me to finish responding to the amendments. It has been a long debate, but of course I will give way to him. I am nearly at the end of my response.

Amendments Nos. 45 to 49 would disapply the charge under schedule 15 from any arrangements made before the date of the pre-Budget report. I referred earlier to the fact that between that report and publication of the Finance Bill, at least 30,000 schemes were marketed to try to get round the legislation, which the House has not yet finished considering. That reflects the view that schedule 15 is retrospective in its effect. However much I may offend Conservative Members, I do not accept that view. People with structures affected by schedule 15 have made arrangements that they fully intended to make for future effects. That is the whole point of the exercise. Anyone doing that must face the possibility that future tax changes will affect the future tax consequences of what they have done. I would be amazed if their financial and legal advisers did not have that little caveat at the bottom of the agreement, pointing out that this is not a guarantee for all time because tax consequences can change.

If schedule 15 brings home the message that avoidance is not a one-way bet—by that, I mean that people do not just get away with it and then do not have to do anything about it—it will be a useful addition to the direction of the benefit in the schedule. We are saying that it is better if people do not attempt change in the first place. The law of the land is that people pay this tax, and we expect them to do that. We as parliamentarians, not as any one political party—