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Capital Transfer Tax

Volume 977: debated on Monday 28 January 1980

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asked the Chancellor of the Exchequer what would be the cost to the Revenue if the bands of capital on life insurance gifts on which capital transfer tax is paid were doubled, and if the same rates of tax were applied on these doubled levels.

I assume that what my hon. Friend is suggesting is a third scale of rates for capital transfer tax which would be applied only to lifetime gifts of insurance policies, the scale being constructed in such a way that the portion of value applicable to each rate of tax would be double the amount set out in the second table in section 37(3) of the Finance Act 1975. It is estimated that the direct full-year cost of applying such a scale to assignments of life insurance policies by way of gift would be under £1 million.