Clause 55

Finance Bill – in a Public Bill Committee at 7:15 pm on 22nd May 2007.

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Trust gains on contracts for life insurance

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

Photo of Theresa Villiers Theresa Villiers Shadow Chief Secretary to the Treasury

I should just like to emphasise that the same point that I made in relation to the previous clause applies in respect of this clause, which again makes a correction and, again, the CIOT is concerned that the Revenue is expecting people to submit tax returns based on an incorrect assumption. The CIOT goes as far as saying:

“It is deplorable that HMRC are...purporting to deny a tax benefit in direct contradiction to the relevant legislation.”

The Treasury has admitted its error. It is unfair to penalise the taxpayer for a mistake that was made by Ministers. I hope that, in this case, too, the Economic Secretary and his officials will make the greatest efforts to ensure that those affected by this correction are well aware of the need to postpone submitting a return until after Royal Assent.

Photo of Edward Balls Edward Balls The Economic Secretary to the Treasury

I understand that although the clause corrects the position, unlike the previous clause it corrects it even though the position was in favour of trusts, rather than against them. In any case, the hon. Lady made the same point as previously, so I am very happy to make the same point as previously, too.

Clause 55 ordered to stand part of the Bill.