To ask the Chancellor of the Exchequer what would be the total cost in a full year of charging individuals, companies and trusts at the rate of 25 per cent. on their capital gains while increasing the annual gross exemption and the chattels exemption to £10,000 in all cases. [34209]

The cost of charging individuals, companies and trusts at the rate of 25 per cent. on their capital gains while increasing the annual exempt amount for individuals to £10,000 and trusts to half this amount is estimated to be £450 million for 1996–97 liabilities, rising to £700 million in a full year in the medium term. It is not possible to estimate the cost of increasing the chattels exemption to £10,000, but this is likely to be very small in comparison with the figures of £450 million or £700 million.Estimates given take account of the likely effect of changes on the volume of disposals in a full year, caused by changes in taxpayers' behaviour.