To ask the Chancellor of the Exchequer if he will (a) update the estimates given for the cost of capital gains tax business paper relief in 2001-02 and 2002-03 in his Tax Ready Reckoner November 2002 and (b) give an estimate for the years from 2003-04 to 2007-08. (148562)

The estimates of the cost of the relief as published in the Tax Ready Reckoners and in table A3.1 of Financial Statement and Budget Reports are for business and non-business assets combined. Taper relief is dependent upon the volume of disposals, which in turn is driven by changes in asset prices, particularly share prices. The movement between 2001-02 and 2002-03 was also influenced by the maturing of business asset taper relief.

The latest estimates of the Exchequer impact of taper relief for 2001-02 to 2006-07 are as follows.

Figures for 2005-06 and 2006-07 are available in the ‘Estimated costs of the principal tax expenditure and structural reliefs’ table at http//www.hmrc.gov.uk/stats/tax_expenditures/table1-5.pdf. Figures for 2007-08 are not available.

The estimated costs are not the same as the yield from abolition of taper relief as they do not take into account any behavioural changes which would occur if taper relief was abolished.