(except clauses 4, 5, 20, 28, 57 to 77, 86, 111 and 282 to 289, and schedules 1, 3, 11, 12, 21 and 37 to 39) - Schedule 15 - Charge to income tax on benefits received by former owner of property

Part of Finance Bill – in a Public Bill Committee at 9:45 am on 20 May 2004.

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Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury) 9:45, 20 May 2004

I will when I have finished this point.

Either people are within inheritance tax rules, or they are subject to the charge. The rules say that inheritance tax is charged on the estate according to its value when the owner of the estate dies. The hon. Member for Arundel and South Downs is asking for something else. Say I decide to give my son my house now, and I have it valued. I do not want to pay the income tax charge so, having used a contrived scheme, I elect to say that I want to transfer the house back. However, I still want to pretend that I transferred it to my son so that if I live for another 40 years—as a young woman, I am hoping to live slightly longer than that—my son will be liable to inheritance tax not on the worth of my estate at the time of my death but on its worth when it was transferred in 2004. That is not agreeable.