To ask the Chancellor of the Exchequer what effect on the income generated to the Exchequer has resulted from the new regime for the taxation of loan relationships, derivative contracts and foreign exchange gains and losses since 2002. (104638)

FA 2002, the Loan Relationships and Derivative Contracts legislation incorporating Foreign Exchange, refocused the rules for taxing complex financial transactions to enable them to reflect and respond better to a dynamic and evolving market. At the same time, tax and accounting measures of profits were aligned and structural weaknesses that had given scope for avoidance were addressed. At the time we estimated that avoidance by corporations using schemes involving financial instruments amounted to an Exchequer loss of around £350 million per annum. Given the wide-ranging remit of the FA 2002 changes, we have not been able to isolate the contribution of these rules to the overall increase in CT in the intervening years.

To ask the Chancellor of the Exchequer what effect on the income generated to the Exchequer since 2000 has resulted from the (a) changing of double taxation relief rules to limit the use of mixer companies to shelter low taxed foreign profits from UK tax and (b) new accounting rules for apportioning interest payable and the income of life assurance companies. (104639)

Estimates for both measures were included in the 2000 Financial Statement and Budget Report. The first measure was extensively refined by Finance Act 2001 and, when these refinements are taken into account, the full year cost to the Exchequer was estimated to be £25 million. Otherwise, there are no subsequent estimates.