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Tax Credit: Pension Funds

Volume 497: debated on Tuesday 13 October 2009

To ask the Chancellor of the Exchequer which public sector pension schemes have incurred costs arising from the abolition of dividend tax credits. (288688)

The Treasury has not made an assessment of the effect on the costs to public sector pension schemes arising from the abolition of payable dividend tax credits. The decision in 1997 to abolish payable dividend tax credits was taken to remove a distortion in the tax system, which had encouraged companies to pay out their profits in dividends, rather than retain them for reinvestment in the business. The measure was part of a wider package of measures designed to improve the climate for long-term investment in the UK.