Clause 183 - Authorised unit trusts, OEICs and common investment funds

Finance Bill – in a Public Bill Committee at 4:15 pm on 17th June 2003.

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Question proposed, That the clause stand part of the Bill.

Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary to the Treasury

The provisions are welcome and will improve the operation of markets, but why have they been restricted to particular categories of collective investment? Are the Government considering extending them to all collective investments including investment trusts?

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon

Those who benefit from the clause will welcome it. It is the only clause in the Finance Bill on inheritance tax. Can we address inheritance tax in general terms? The nil-rate band has been increased from £250,000 to £255,000. The increase is small and the tax catches more and more people, who are invariably not well-off by most standards. Inheritance

tax is a tax levied on those who do not have sufficient money or assets to avoid it legitimately. Will the Paymaster General tell the Committee whether the Government have any proposals in relation to inheritance tax? Will she please let us know whether they intend to consult on it?

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

I assure the hon. Gentleman that I will certainly keep him informed of developments in due course.

Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary to the Treasury

Since the wider issue has been raised, will the Paymaster General focus on inheritance tax relief applying to private companies, which should be designed to allow them to keep going and not close down because of what they have to pay? There are satisfactory arrangements for trading companies, but there are increasing issues concerning definitions of trading, investment and property that the hon. Member for Torridge and West Devon (Mr. Burnett) touched on earlier. Although I know that it is a difficult territory, some of the concepts are now out of date and worth revisiting. The Paymaster General will be aware of correspondence that she has had on that issue. I hope that she will also examine the agenda of modernising IHT so that it does not damage the economy.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

I am extremely grateful to the hon. Gentleman for advising me where I should settle on the tax system next in preparing the pre-Budget report, and I shall certainly pass on his comments to the Chancellor.

Question put and agreed to.

Clause 183 ordered to stand part of the Bill.