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Savings Income

Volume 410: debated on Monday 18 August 2003

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To ask the Chancellor of the Exchequer (1) what his estimate is of the cost of abolishing income tax on (a) all savings income and (b) all savings income up to the start of the higher rate threshold; and if he will make a statement; [130562](2) what his estimate is of the cost of abolishing the existing capital gains tax and savings tax regimes, and taxing capital gains and savings as income under the existing income tax regime; and if he will make a statement. [130563]

The current tax yield from taxation of interest on savings in 2003–04 is set out in the following table.

The current tax yield in 2003–04 from taxation£ billion
(a) All savings income2.5
(b) All savings income up to the start of the higher rate threshold1.4

Note:

This estimate is based the 2000–01 Survey of Personal Incomes and consistent with Budget 2003.

This yield would be lost if no tax was charged, but we are not able to provide the full cost of such a change as other behavioural effects will substantially distort the impact on costs of such a move.