Clause 96 - Gifts of real property to charity

Part of Finance Bill – in a Public Bill Committee at 4:00 pm on 13th June 2002.

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Photo of Mr Howard Flight Mr Howard Flight Conservative, Arundel and South Downs 4:00 pm, 13th June 2002

May I seek further elucidation? I believe that the Economic Secretary understands my basic point. Because of the way that the process works, one would not be able to use a loss if it was gifted; selling the asset and then giving the charity cash to buy it—going around the houses—is designed to obviate that. However, the Economic Secretary made it clear that that route would not work because, under the present arrangements, the transaction would not be deemed to be at arm's length. What other mechanism can the Minister suggest to address the problem? There will be a lack of incentive for people to gift assets that happen to have capital losses attaching to them, as opposed to assets that happen to have capital gains attaching to them. I cannot believe that that is the overall intent of the gift aid package. If the Government do not want to address the problem in the way that the amendment

proposes, do not they see a need to address it in some other way?