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Investment Income Surcharge

Volume 507: debated on Monday 15 March 2010

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.