To ask the Chancellor of the Exchequer with reference to the answer of 17 July 2008, Official Report, column 629W, on investment income surcharge, what the equivalent figure is for 2008-09. (322315)

The exemption limit above which the investment income surcharge of 15 per cent. applied was £7,100 for 1983-84, the last year before the investment income surcharge was abolished. The level of the exemption limit which would have applied for 2008-09 is £19,800 under annual statutory indexation based on changes in the retail price index with rounding up each year to the nearest multiple of £100.

Applying a rate of surcharge of 15 per cent. to individual’s investment income above an exemption limit of £19,800 would yield around £3.7 billion in respect of the 2008-09 tax year, although most of this income would not be received until the following year.

This estimate is based on the Survey of Personal Incomes 2006-07 projected forward in line with the 2009 pre-Budget report assumptions. The figure excludes any estimate of behavioural response which could be considerable given the extent of the change.