|Previous Section||Index||Home Page|
Amendment No. 5, in page 358, line 36, leave out '17th March 1986' and insert '19th June 2003'.
Amendment No. 47, in page 358, line 36, leave out '17th March 1986' and insert '9th December 2003'.
Amendment No. 6, in page 358, line 44, leave out '17th March 1986' and insert '19th June 2003'.
Amendment No. 48, in page 358, line 44, leave out '17th March 1986' and insert '9th December 2003'.
Amendment No. 7, in page 360, line 17, at beginning insert
Amendment No. 8, in page 360, line 30, leave out '17th March 1986' and insert '19th June 2003'.
Amendment No. 49, in page 360, line 30, leave out '17th March 1986' and insert '9th December 2003'.
Amendment No. 9, in page 360, line 34, at end insert
Amendment No. 225, in page 360, line 40, leave out
Amendment No. 10, in page 361, line 36, at end insert
Amendment No. 226, in page 361, line 48, leave out from 'and' to the end of line 2 on page 362 and insert
Government amendment No. 91.
Amendment No. 227, in page 362, line 44, leave out 'and' and insert 'or'.
Government amendments Nos. 92 and 93.
Amendment No. 44, in page 363, line 45, leave out '£5,000' and insert '£50,000'.
Government amendments Nos. 94 to 108.
Amendment No. 11, in page 366, line 41, at end insert
Mr. Flight: The Government's pre-owned assets measures, which are embodied in clause 84 and schedule 15, have elicited more complaint from constitutional lawyers and others than anything else in the Bill. I have been deluged with letters, e-mails and other communications from eminent lawyers, a group of whom are considering taking the matter to the European Court of Justice. Those complaints are made with good reason. What the Government saw as a clever manoeuvre raises major issues of principle in relation not only to the basis of taxation, but to the rule of law; and all sorts of unfairnesses were not fully remedied by the amendments that were passed in Committee. I accept that the Government have addressed some of the worst effectsunintended, I trustof the measures, but there is still a lot to be considered.
One aspect of the provision that has given rise to objections is its application to individuals whom the Inland Revenue has previously accepted as being outside the gifts with reservation rules. Its alleged intent is to recoup the tax and punish people who had avoided the gifts with reservation rules. It also applies to some individuals who fall within statutory gifts with reservation exemptions, which were introduced by this Government.
However, the main objection to the provision is that it is retrospective in principle, even if cleverly designed to be retroactive in method. It undermines the traditions of British tax law because the legitimate and reasonable expectations of taxpayers have been denied. It is clearly a piece of inheritance tax legislation in substance, if not in form. The Government's previous policies on inheritance tax cannot be ignored, and must be examined in relation to these proposals.
Rob Marris (Wolverhampton, South-West) (Lab): Will the hon. Gentleman explain how his intellectual proposition differs from what his party did in government when they tapered off, then completely abolished, mortgage interest relief? When we took out our mortgage in 1984, we got mortgage interest reliefthat was the reasonable expectation, to use the hon. Gentleman's words. When that was done away with, I happened to support it, but one could have advanced the same argument about retrospectivity in that case.
Amendments Nos. 2, 3, 5, 6 and 8 would restrict the starting date of the measure to 19 June 2003, as that was the date on which the Government last amended the gifts with reservation rules. They gave no indication that those changes should have retrospective effect.
7 Jul 2004 : Column 877
Correspondingly, and perfectly reasonably, any taxpayer who had undertaken planning under previous versions of the gifts with reservation rules would have been led to understand that their planning had achieved its objectives. Indeed, in summer 2000, Mr. Peter Twiddy of the Inland Revenue capital taxes office specifically confirmed to the Society of Trust and Estate Practitioners that that was the case. That differs greatly from what Governments do in relation to various tax reliefs, whether to mortgages or pension savings. Individuals who had completed their planning would have acted accordingly. Many took out life policies on a seven-year-term basis to cover the tax liability were they to die within seven years of their gift, but they could have reduced their whole of life cover. They would not have organised their financial affairs on the basis that they would need to pay a rent to live in their own homes.
If the Government had wished to introduce a new income tax in relation to occupation, it would not, much as one might have generally objected to it, have been seen as retrospective. The issue here is that the provision is concerned in substance with inheritance tax and that it is narrow and penal.
|Next Section||Index||Home Page|