Taxation: Inheritance Tax

Debate between Baroness Gardner of Parkes and Lord Sassoon

Wednesday 21st December 2011 Lords Chamber

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government whether, in the light of the Law Commission’s Report Intestacy and Family Provision Claims on Death, they intend to review inheritance tax law.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, there are no plans to review inheritance tax law in the light of the Law Commission’s report. The first £325,000 of every estate is exempt from inheritance tax. Inheritance tax is not usually paid on transfers of assets between spouses or civil partners. Only 3 per cent of estates are expected to have an inheritance tax liability in 2010-11.

[Baroness Gardner of Parkes]

The Answer does not surprise me but does disappoint me. Perhaps we do not need to look as far as the whole inheritance tax law situation. My concern is about people who live together long-term as carers or sisters—there is the famous case of the Burden sisters—and yet on the death of one, they are often forced to sell their home. Would it not be possible, even for the Chancellor in his Budget, to agree that under such circumstances there should be no obligation to sell the family home? To make people homeless at the present time, when things are pretty desperate for many people, would perhaps cost the Treasury more in the social benefits that they will require than exempting the home in which they have lived for so many years.

[Lord Sassoon]

My Lords, it would be nice to come to the House bearing gifts in answer to the final Question before the Christmas Recess. However, I think noble Lords would be surprised if a Treasury Minister, of all people, came here to give some good news on this or much else. I say to my noble friend that I hear—

Taxation: Healthcare Insurance

Debate between Baroness Gardner of Parkes and Lord Sassoon

Thursday 9th June 2011 Lords Chamber

[Lord Sassoon]

As I have explained, to date I have seen no evidence that leads to that conclusion. The Treasury has done no detailed studies on the matter.

[Baroness Gardner of Parkes]

My Lords, is the Minister aware that the health reforms seek to ensure that the sort of situation that the noble Baroness, Lady Farrington, described, whereby the National Health Service has had to pick up all the failings of the private sector, will not happen again?

[Lord Sassoon]

My Lords, I can only repeat that there is no intention to change the relationship between private healthcare provision and entitlement to NHS care.

Housing: Shared Ownership

Debate between Baroness Gardner of Parkes and Lord Sassoon

Monday 25th October 2010 Lords Chamber

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government what they expect to be the effect of the limitations on shared ownership for first-time buyers as set out in the Financial Services Authority’s policy statement A Specialist Sourcebook for Building Societies, published in March 2010, stating that a maximum of 15 per cent of a building society’s whole mortgage book will be available for non-prime owner-occupied mortgages.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the regulation of building societies is a matter for the Financial Services Authority, which is an independent body. I have, however, raised this question with the FSA and I understand that it has written to my noble friend, explaining how it uses its Specialist Sourcebook for Building Societies.

[Baroness Gardner of Parkes]

I thank my noble friend for that Answer, but is he aware that the 15 per cent limit also covers buy-to-let, commercial and social landlords and equity release schemes, so an awful lot is crammed into it? The problem seems to have arisen because the FSA says that this is guidance but building societies have said at a recent meeting of 14 major and minor societies that individual supervisors from the FSA have insisted that this was an absolute maximum and that there was no question of discretion. Will my noble friend clarify that this is just guidance?

[Lord Sassoon]

Well, my Lords, the FSA, and what my noble friend has reported it as saying, must stand for themselves. I cannot directly answer for the FSA. However, my clear understanding is that the source book offers guidance on the way that the FSA undertakes its regulation and does not consist of formal rules. Indeed, for those societies with advanced risk management systems, there is not even an indicative limit on the level of shared ownership in which they can engage. As I understand it, building societies can lend within their statutory limits. They can undertake any lending up to their statutory limits provided they have appropriate controls in place.

--- Later in debate ---

[Lord Sassoon]

My Lords, it is important that we have diversity and a variety of providers of financial services. In that context, building societies of course have an important role to play—particularly in the area of shared-ownership mortgages, which is the subject of the Question. Many building societies continue to offer products in this area, and I welcome that.

[Baroness Gardner of Parkes]

Will the Minister confirm that, in spite of what my noble friend Lord Forsyth said, there is a self-limiting situation, in that someone applying for shared ownership can have the mortgage for their percentage of ownership tailored exactly to an amount that they can be sure of paying?

[Lord Sassoon]

My Lords, questions about what people can afford to pay are essentially for the mortgage provider to judge in the context of its commercial decisions, made within the responsible lending guidelines set down by the FSA.

Housing: Lettings

Debate between Baroness Gardner of Parkes and Lord Sassoon

Monday 26th July 2010 Lords Chamber

[Baroness Gardner of Parkes]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I remind the House that I have a declared land and property interest in the Register of Lords’ Interests.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the tax system already treats both holiday lettings and residential lettings as businesses. However, furnished holiday lettings can benefit from some of the more generous tax rules for trades. This reflects the fact that they offer extra equipment and services in order to compete with hotels and guesthouses. We have no plans to extend these rules to other property businesses.

[Baroness Gardner of Parkes]

I thank the Minister for that disappointing reply. Is he not aware that if you have holiday lettings, you can roll over capital gains and therefore there is every encouragement to extend your business, whereas if you are a private residential landlord, you do not have that? Furnished holiday accommodation can only be let to anyone for a maximum of 31 days. Surely there is a desperate need for long-term residential accommodation in this country.

[Lord Sassoon]

My Lords, I fear that there is more disappointment coming. I had one grandparent who came from the great state of New South Wales and one parent who was educated there, and I thank my noble fellow Australian for her Question. However, the Government have no plans to change the tax or other arrangements for tenancies in the private rented sector. Since the assured shorthold tenancy rules came in in 1988, the private rented sector has grown steadily and responded flexibly to changes in the wider housing market, and some 21 per cent of tenancies now last for five years or more.