Jesse Norman
MP for Hereford and South Herefordshire · Conservative · United Kingdom
“In view of the new Prime Minister’s spending priorities, it now seems highly unlikely that the ruinously expensive current plans will be put to the House before the end of this year. Seven months have already passed with no action.”
“10 North have real spending powers of its own? If the answer is yes, then this will be a new kind of cross-departmental Ministry—perhaps a territorial Ministry, like a regional Government but with no defined scope or mandate. We will need to see the legal instruments delegating Treasury authority and functions to it.”
“I rather fear that, given our longevity and at least the level of banter on the Government side of the Dispatch Box, we will be seen over time as the Morecambe and Wise, or perhaps the two Ronnies, of British politics.”
“The past few weeks have brought news of the deaths of Dolly Parton, Tim Curry and Wendell Berry. I am sure that many colleagues will share my sense of shock and sadness at the loss of those extraordinary figures, but also give great thanks for their lives. Truly, we live in a world of change.”
“10 North will not have spending power of its own, then ultimately the Treasury and the Chancellor will continue to sign off on its public spending and on any taxing matters. Decentralisation is really important, but No. 10 North will not be a means of decentralisation in this scenario; it will be just another layer of Government.”
“But we are not going to cast nasturtiums, in the words of a friend of mine, on any of this nonsense—not even on Baroness Lloyd and the hopeless Building Digital UK, who have entirely failed to address the issue of fibre broadband in neglected parts of my constituency and simply repeated the same language of incompetence and failure to me…”
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“Under current rules, digital businesses can derive significant value from UK users, but in many cases they pay little UK tax because international corporate tax rules do not recognise the user-generated value when allocating the right to tax profits between jurisdictions, so undermining the fairness and sustainability of our tax system. It is therefore now widely accepted that the rules require updating. The Government remain at the forefront of international efforts to secure a comprehensive long-term solution to the issue, and we are fully engaged in discussions with OECD and G20 partners. Although we welcome recent progress towards a global solution, there remain important and difficult issues to resolve, so the Government are acting now to address those widely held concerns in a fair and proportionate manner.”
“It will reduce by half the revenues subject to DST where those revenues are derived from an online marketplace transaction between a UK user and a user from a jurisdiction that also levies a DST. As this is a new tax, there are also extensive provisions to ensure the framework of the tax works as intended. These draw on many existing tax concepts to reduce the burden of implementing the new tax for what we hope will be a limited time. The digital services tax was announced at Budget 2018 as a response to changes brought about by the rapid development of our digital economy. That economy brings many benefits, but it has posed a significant challenge for international corporate tax rules.”
“I will explain later why those three services are in scope of the new tax. DST will apply only to groups with annual global revenues from services of more than £500 million. It will then be charged on the revenues only where they are attributable to UK users, and only on amounts above £25 million. An exemption will exclude online financial services marketplaces from the definition of an online marketplace. Businesses making low profit margins on their in-scope activity will be able to pay the tax at a reduced rate, while loss makers will pay nothing; that will minimise the distortions that a tax on revenues can create. To further reduce those distortions, a relief for certain cross-border transactions is also included.”
“Thank you, Mr Rosindell. I am grateful to all members of the Committee for joining us this morning; I am also grateful it is not too hot outside. It is a rare moment in Parliament when one gets to introduce a new tax—the digital services tax—on to the statute book. With the clauses grouped together, it is appropriate to spend some time in my opening remarks outlining the overall architecture of the tax and how it is designed to work; then we can pick up specific details in the clauses as we come to them. Clauses 38 to 44 introduce legislation to enact the digital services tax, and they set the scope of this legislation. DST will levy a 2% charge on the revenues that groups receive from providing specific digital services to UK users. The specific services in scope of the charge are search engines, social media, and online marketplaces.”
“So, it is a very dynamic sector. My hon. Friend is also right to highlight—in a way entirely unscripted and unprepared with me—the “pioneering” nature of this tax. It is a new form of tax, which seeks to tax UK user-generated content. Therefore, it is an important démarche in our history to consider whether this is an appropriate way in which to tax. I believe it is, and I believe that Parliament will think it is, but we will of course continue to review and take feedback on it. I point out that there have been two sets of consultations on this already—an original, principal set and then a more technical one.”
“And as with other taxes, I have no doubt that they will become increasingly expert in doing that and evaluating the submissions that are made; of course, submissions will vary in their quality and I am sure that evaluating them will be, in turn, an educative process for tax officials at HMRC. My hon. Friend the Member for Harrogate and Knaresborough, a beloved former Treasury Minister, made a couple of important points. Of course, he is absolutely right that we are talking about a dynamic market or sector. All markets are intrinsically dynamic and we are talking about an intrinsically highly dynamic sector of activity, perhaps never more so than at this particular moment in our history, when we are seeking—internationally and nationally—to find a whole range of new solutions to support people and maintain the economy.”
“So, it is not our expectation that there should be any enormous additional informational burden; there may be a selection process of pulling information out, but not an enormous informational burden. I will also point out that the approach taken is one of self-assessment, which is to say that we expect businesses that have UK user-generated content revenue to come forward and self-assess. In a way, that relates to the question put by the hon. Member for Houghton and Sunderland South about whether HMRC has enough resources. I am pleased to tell her that it already has a digital team in place, whose job is to monitor this process of self-assessment.”
“I could not possibly comment on the future direction of this tax, but I will say that I do not think that £2 billion is a trivial sum of money to raise from a new tax. I think the tax has been set at an appropriate level, and officials and the Government believe that, too. My hon. Friend also asked whether businesses affected by the tax will have to collect a vast array of new information, and whether that may be burdensome to them. This is one area where, on reflection, he may be able to take a degree of comfort, because we are only talking about very large businesses, and about businesses for whom tracking users and extracting revenue from them is what they do for a living.”
“All I can say to my colleagues on the Government Benches who have made their speeches is, “soft, what light through yonder window breaks? It is the east”— and my hon. Friends the Members for South Cambridgeshire, and for Harrogate and Knaresborough. What could be finer? I thank them very much for their interventions. If I may, I will start by responding to those interventions and then come on to the very detailed thrust of commentary from the shadow Chief Secretary. My hon. Friend the Member for South Cambridgeshire rightly made the point that taxes are, of their nature, potentially distortive, and revenue taxes, of their nature, in particular. It is therefore appropriate to proceed with a degree of caution in considering how to introduce a tax, and to acknowledge that. He also made the point that many taxes start modestly.”
“The high street is a rapidly evolving entity, as has been pointed out. Many high street businesses—even quite small ones—have online businesses of their own, which are effective supplements to what they do. They will not be caught by this tax, because in many cases their activity will be too small. However, it is in those hybrid models, which are evolving, where I think much of the future of the high street may lie. It is not by any means obvious that the effect of the pandemic has been solely to privilege the online versus the offline. Plenty of online businesses have been clobbered by the pandemic in a way that many offline businesses have as well.”
“I think it is fair to say, without blowing the Government’s trumpet too hard, that whether it is the diverted profits tax, work on base erosion and profit-shifting, corporate interest restriction rules or, indeed, on private country-by-country reporting rules, the Government have been at the forefront of much of the most progressive tax changes of the past few years, which is entirely appropriate. The hon. Lady raises the question about the relationship with high streets. No Member of Parliament does not feel the concern about the high street, because they go back to their constituencies every week and see the effects of change. It is important to be aware that this tax is about addressing changes, or the way in which the tax rules are not fully capturing the value that is being generated.”
“I appreciate that, of course. I am grateful to the hon. Lady for welcoming the principles behind this, as she is right to do. For the same reasons I described to my hon. Friends, I do not think it appropriate to think of this as in any sense delayed. We are at the forefront of a developing area of tax law. We have not thought it appropriate to wait for international procedures. I am sure that, on reflection, she would prefer that we not have waited, both because of the revenue generated for public services but also because we deem it important—I have no doubt that the Labour party feels the same way—to try to make progress in this important area, removing what we see as ineffective rules or improving the working of the rules within the tax code.”
“As I said, it is a tax that we will be very happy to take off the statute book as and when the OECD process starts to yield effective results, which it may well do before too long.”
“I thank the hon. Lady very much for her question. As I said, the estimate by the independent OBR is of £2 billion over a five-year period. Our estimate is certainly £2 billion over a five-year period. I do not think that is a trivial amount. As has been discussed, we of course recognise the importance of generating revenue, but we also think it important to introduce a tax that is sustainable and that lays a framework that can be effective while it is in operation. There are countries that have had higher taxes, and we have offsetting rules regarding the interaction with those taxes in order to create equity as between the different jurisdictions, so it is a perfectly fair question, but we have taken the view that 2% is an appropriate level for a new tax.”
“It is absolutely open to other parties to disagree about how they would put it, but the Government have taken the view that this is the appropriate level for a new tax—it is on revenue and, as I have said, is therefore potentially distortive. We have had feedback and consultations that reflect concerns on both sides of the issue.”
“That is, of course, a proper question to ask, but we have taken the view that this is a tax that we would like to take off the books in due course, when there is an OECD agreement. That agreement may take a variety of different forms; it may raise more tax or less. Different countries have different overall tax systems and seek to address different forms of corporate behaviour in deriving revenue. In the UK, there are plenty of businesses deriving revenue from user-generated content. Some of them will be over the thresholds that we are talking about, and those are the ones that are within the scope of the tax.”
“The Government are clear that we will maintain this tax until the OECD passage of agreement—there may be other supervening factors—causes us to remove it. I commend the clause to the Committee. Question put and agreed to. Clause 38 accordingly ordered to stand part of the Bill. Clauses 39 to 44 ordered to stand part of the Bill. Clause 45 Meaning of “the threshold conditions””
“The point, though, is to design a proportionate tax with a low rate, and another reason why we have chosen that rate is that we do not wish to be any more distortive or invoke any more double taxation than is absolutely necessary. As I said, our preference is to move to a global solution. The hon. Lady talked about international leadership. We look forward to a day when the OECD will be able to pass an agreed set of rules with multinational support that give a proper basis for the levying of tax. As she is aware, a number of proposals are under discussion. They and the processes that generated them are well described in the House of Commons Library note, and I encourage any Members who want more detail to look at that.”
“As I have said, many of them collect a great deal of information, including IP addresses, delivery addresses, billing addresses and so on. To come to a point that the hon. Lady made earlier, that is another reason why the use of virtual private networks is more of an in-principle worry than an actual worry, because famously, so much other information is collected about the users of those services from multiple sources. That should help them to make those disclosures. The hon. Lady asked about double taxation. It is true that some businesses will pay both UK corporation tax and the digital services tax. For reasons of international law, we are not capable in law of discriminating in favour of UK businesses, and we are not going to.”
“A very wide definition of revenue has been adopted, and we can go into that in more detail. As I said earlier, we require companies to do it. It is a self-assessment scheme, and we ask companies to designate, evidence and disclose the UK user-generated revenue of the different kinds that we have touched on. On GDPR, which is the relative question, the legislation has been written so that businesses are expected to use information that they already have to make the determination. We believe that it is compatible with GDPR, and that it draws on data that is already collected. We are not inviting the groups to collect new information that might be in some sense at odds with people’s rights or in contravention of the law, and of course they will have their own GDPR processes to follow.”
“UK user-generated content is a strong basis on which to levy a tax. There is a contrast with, for example, media streaming. The hon. Lady talks about how much she has enjoyed various media streaming services, and I welcome that, but we can all be relatively certain that she has not contributed a lot of UK user content to them— [ Interruption. ] Unless delight and shock are forms of UK-generated content. I want to reassure the hon. Lady a bit about the apportionment of revenue. She is absolutely right that, as the history of base erosion and profit shifting around the world shows, many companies have found it only too easy to move the effective location where tax is generated. In part, this tax, by taxing revenue overall, is designed to sidestep a lot of the temptations that might exist to work round the edges.”
“The hon. Member for Houghton and Sunderland South raised the issue of multilateral action and asked whether adequate leadership had been exercised. It has been recognised that the OECD has made some good progress in this area recently, which has been achieved with a lot of urging and support from this country. Ultimately, we all agree that international and corporate tax needs to be addressed in a global and inclusive way. That would be the Government’s strong preference, but we have not waited—I do not think the hon. Lady would want us to wait—because we think it is important to take a lead. It is also important to say that when we have done that, we have tried—as one might expect with a new tax—to target an area where there is a very clear rationale or justification for the tax that is being levied.”
“I thank my hon. Friend for that comment. In a way, he leads me on to my next remarks in response to the hon. Member for Streatham. He is right. The dynamic market that we are seeking to tax is one where revenues are not absolutely predictable; they may be higher or lower than estimated. The tax therefore stands in contrast to a well-established tax such as VAT, because we can be much more certain about how much that tax will raise. It is also important to understand that this is not a tax designed to penalise certain companies. The strength of our online sector in the UK has been a very important part of the response to coronavirus, as I have mentioned. There is no attempt to pick out companies and target them with the tax. There is a concern about failings in the international tax rules, and that is what the Government seek to address.”
“Overall, as I have noted, the tax is expected to raise up to £2 billion over the next five years in a proportionate and responsible way.”
“Online marketplace transactions will occur between two users, and those users may be based in different jurisdictions. Where one of those users is a UK user, revenues attributable to the transaction will be subject to the UK DST. Where the other relevant jurisdiction also levies a DST, however, there is a risk that the revenues could be taxed twice. Clause 49 sets out the relief for certain cross-border transactions, minimising that risk by ensuring that, in such cases, only 50% of the relevant revenues will be subject to the UK DST. Finally, clause 50 sets out when DST payments are due and payable. Together, the clauses mean that the DST charge is proportionate while ensuring that digital businesses pay a UK tax that reflects the value they derive from UK users.”
“A DST tax rate of 2%, as we have discussed, ensures that digital businesses will make a fair and proportionate contribution to our public finances. Clause 46 also sets out how each member of a group should calculate their DST liability. The Government recognise that some businesses have concerns about levying a tax on revenues rather than profits. That is why our strong preference is for a long-term profits-based global solution. That can be implemented only following an international agreement, however, so although the DST applies to revenues, the alternative basis of charge will reduce the charge for businesses with low profit margins or losses on their chargeable UK activity. Clauses 47 and 48 therefore set out the alternative basis of the DST charge and how DST liability should be calculated on that basis.”
“We now come to clauses 45 to 50. The last discussion was quite a long one, but hopefully it was helpful in framing the overall legislation within which we can now discuss the more specific elements, so we may not need to dwell as long on these parts. Clauses 45 to 50 set out how the digital services tax charge will be calculated. The Government have sought to ensure that the DST is proportionate and charged only to those businesses that are best able to generate significant value from their users. As such, it will apply only to groups with annual global revenues from the named services of over £500 million. DST will be charged only on those revenues where they are attributable to UK users and only on amounts above £25 million. Clauses 45 and 46 set out the thresholds and the allowance, and they set the rate of the charge at 2%.”
“Ordered, That further consideration be now adjourned. —( David Rutley . )”
“The tax is designed to work based on the consolidated figures of groups as groups. The concern about royalty payments is that, typically, royalties are used within groups to move revenues around, so, from a gross standpoint, they tend not to fall within the scope of the revenue charge, and they should not. Of course, from a tax-principle perspective, there are perfectly legitimate royalty uses and payments that one would want to continue to allow in any case. The alternative charge takes into account only expenses in the consolidated accounts, and is not therefore principally touched by the concern about intra-group royalties, for the reasons that I have described. Question put and agreed to. Clause 45 accordingly ordered to stand part of the Bill. Clauses 46 to 50 ordered to stand part of the Bill.”
“Lady raised a concern about the safe harbour alternative charge arrangements. That is designed to ensure that the DST is not punitive for businesses with low profit margins or losses, and I think that is appropriate. At the margin, there is a risk that some businesses might try to reconfigure their activities to qualify for that, but I think it will be relatively clear to the Revenue from self-assessment when a business that is intrinsically high-margin is disguising that or is, essentially, seeking to utilise the alternative charge unfairly. It is worth saying that the alternative calculation applies only to in-scope UK activity, so businesses will not be able to reduce profit margins by using out-of-scope or non-UK activity. That is an important safeguard. The hon. Lady asked about royalties.”
“I thank the hon. Lady for her questions. She asks whether the £25 million threshold has the effect of clobbering small businesses. Our view is that the purpose and effect of the thresholds is to levy the tax on the businesses that are best able to afford it, and that to have a global revenue base of £500 million and revenue attributable to UK users above the £25 million threshold is in itself a basis that excludes a vast number of small start-ups—which might turn out to be wildly successful and effective unicorns. We do not believe that the threshold will inhibit growth. If this is a direction in which tax will be going over time, as I rather think it is and as colleagues have suggested, an awareness of how tax will bear on future revenues and profitability is in itself an important part of any business’s market development. The hon.”
“This meets the Government’s commitment to allow doctors to spend as much time as possible treating patients, and supports vital public services while ensuring that the very highest earners pay their fair share of tax. I commend the clause to the Committee.”
“These measures will also apply equally across public and private sector registered pension schemes. However, to ensure that the very highest earners pay their fair share of pension tax, the minimum level to which the annual allowance can taper down is reducing from £10,000 to £4,000 from the beginning of this tax year. This will affect only those with a total income, including pension accrual, of over £300,000. These measures will cost over £2 billion over the next five years. The changes demonstrate that the Government are committed to ensuring that hard-working NHS staff do not find themselves reducing their work commitments as a result of the interaction of their pay, their pension and the tapered annual allowance tax regime.”
“It delivers a tax solution, which has been the British Medical Association’s primary request, and it comes into effect from 6 April, which is the beginning of the current tax year. The changes made by clause 21 mean that no one with income below £200,000 will now be caught by the tapered annual allowance. The annual allowance will only begin to taper down for individuals who also have total income, including pension accrual, above £240,000. We estimate that this will take up to 96% of GPs and up to 98% of NHS consultants outside the scope of the tapered tax allowance, based on NHS earnings alone. As this is a tax change, these measures will apply both to clinical and non-clinical staff across the whole UK, and they will apply in the same way to all workforces.”
“In the last tax year, in recognition of the impact that the tapered annual allowance was having on some doctors, NHS England announced a special arrangement, for 2019-20 only, in which doctors in England could use that arrangement to ensure that they would not be worse off as a result of taking on extra shifts. As health is a devolved matter, that special arrangement applied only to England, but we are aware that the Welsh and Scottish Governments also put similar arrangements in place during 2019-20 for NHS staff. Raising the two thresholds at which the tapered annual allowance applies by £90,000 each is the quickest and most effective way to solve this issue for senior doctors and other clinicians.”
“The Government therefore impose limits on pensions tax relief. One of these limits—the tapered annual allowance—has affected some senior clinicians in the national health service and also some individuals in other public service workforces. This measure is the outcome of the Government’s manifesto commitment to carry out a review of the impact of the tapered annual allowance on the NHS. That review built on another review of the effect on public service delivery more widely, which was announced last August. Roundtable discussions with public service stakeholders, including representatives of the health professions, were held as part of these reviews. These reviews concluded at the Budget on 11 March.”
“Thank you very much indeed, Mr Rosindell; it is a delight to see you in the Chair. I start by saying that we are at the point in “The Pilgrim’s Progress” where we are about to enter the slough of despond, and I apologise to all colleagues that the slough is a rather extended period of technical amendments. I can promise them that in due course we will enter the place of deliverance, although possibly not for some time. Clause 21 raises both pensions tapered annual allowance thresholds by £90,000 each and also lowers the minimum annual allowance to £4,000. The Government provide tax relief on pension contributions. To give some background, in 2017-18 income tax and employer national insurance contributions relief cost £54 billion, of which 60% went to higher and additional-rate taxpayers.”
“Clause 22 Entrepreneurs’ relief Question proposed, That the clause stand part of the Bill.”
“The question of whether the allowance taper should be removed has been scouted by some. Of course, unless it was replaced by some other approach, it would have the effect of there being no corresponding reduction in the capacity to add pensions relief. The absence of a taper would therefore create precisely the cliff edge that the hon. Lady warned against. The hon. Lady mentioned the idea of a review. She will be aware that the Treasury had a review only a short number of years ago, which was inconclusive. We continue to reflect on this complex and difficult area of taxation and will do so as we ponder the future fiscal effects. With that in mind, I hope the Committee will agree that the clause should stand part of the Bill. Question put and agreed to Clause 21 accordingly ordered to stand part of the Bill.”
“The BMA said: “The vast majority of doctors are now removed from the effect of the taper and will no longer be in a situation where they are ‘paying to go to work’” as they see it. NHS Employers said: “Employers across the NHS will welcome this significant step in reforming pensions taxation.” That is all to the good. The hon. Lady asked whether we will monitor the clause’s impact. The Treasury will of course monitor it as we do the effects of taxation across the piece. This reform will retain a certain political currency and therefore, I think, support and enthusiasm across the Committee. She also asked about fairness across public services. She will be aware that one of the benefits of a tax reform is that it offers fair treatment across those public services, irrespective of how people work.”
“I think that shows the inner resilience of the organisation. The hon. Lady asked about people somehow being deterred from taking extra shifts in the NHS. She will be aware that NHS England put in place its own measures for last year, and we understand that parallel measures were implemented in Scotland and Wales. The effect of the change, which begins in April, is to give a sufficiently generous increase in the annual allowance thresholds so that up to 96% of GPs and up to 98% of senior medical staff will be out of scope of the tapered annual allowance as regards their NHS earnings. It is interesting to note that, as the hon. Lady rightly acknowledges, that has been widely recognised by the key institutions.”
“I thank the hon. Lady for her remarks and for welcoming these measures. She expresses what I know will be the universal sentiment in this Committee: a sense of profound gratitude to the NHS for the astonishing way in which it and all the public services around them have responded to the crisis posed by coronavirus. I certainly echo that. The hon. Lady talked about underfunding of the NHS. I really do not recognise that at all: the NHS has been very well funded, with continuous above-inflation funding settlements. In relation to coronavirus alone, public services have received over £16 billion, the NHS central among them. However, that only underlines the point that extraordinary work was being done by the NHS before, and it throws into greater relief how flexibly, energetically and effectively it has responded to the coronavirus pandemic.”
“The new £1 million lifetime limit is far more sustainable and better targets the people who it was intended should benefit from the relief.”
“The reform ensures that the Government can more sustainably support small businesspeople with up to £100,000 capital gains tax relief available over their lifetime. The clause also makes special provisions for disposals entered into before 11 March 2020—that is to say, Budget day—that have not yet been completed. The provisions ensure that such people can still use the previous lifetime limit, but only where the disposal has not been artificially structured for the purpose of securing a tax advantage. It is therefore an anti-forestalling rule, with the rules ensuring that everyone pays their fair share of tax. The previous lifetime limit of £10 million was an unsustainable degree of support for those less in need of it, and, as I have said, did not discharge the purpose of supporting entrepreneurship as it should have done.”
“The clause and schedule 22 rename entrepreneurs’ relief as “business asset disposal relief” and reduce the lifetime limit for gains eligible for relief so that from 11 March 2020 the relief can be claimed on gains of up to £1 million. The purpose of renaming the relief is simply to reflect its function and purpose more accurately. The relief offers a reduced rate of 10% capital gains tax on disposal of eligible business assets. Evidence shows that for some people—indeed, quite a few people—the relief has been a tax planning tool, helping some of the richest people in society to pay less tax rather than discharging its purpose of incentivising entrepreneurship and enterprising business activity. Last year, three quarters of the relief’s cost was for claims made by just 6,000 people disposing of assets with gains of over £1 million.”
“It is interesting, as has been noted by Opposition Members, that alongside widespread concern there has also been notable recognition of the importance of that aspect of the relief that I have highlighted from the Federation of Small Businesses. I note that the national chairman described this as a “sensible compromise on Entrepreneurs’ Relief”, in which “everyday entrepreneurs will be pleased to hear the Chancellor say that he has listened to FSB”.”
“I thank the hon. Members for Houghton and Sunderland South and for Aberdeen South very much for their comments. They raise a number of important points. It is certainly true that this relief has attracted widespread criticism from different interested and expert bodies; the hon. Lady is absolutely right to point that out. It is important to note that the Government have tried to strike a balance. An outright abolition might have had the effect of penalising a lot of entrepreneurial activity, undertaken in good faith up to the level that has been determined. That would have been, in the Government’s view, an overreaction to the situation. Therefore, we have tried to strike a balance by trying to keep the vast majority of entrepreneurial activity that is protected in place while cutting back on aspects that are ineffective or regressive.”
“However, the current availability of lettings relief, and the 18-month final period exemption, can mean that people accrue relief on two or more properties simultaneously. These reforms address those concerns and make private residence relief fairer, by better targeting it at owner-occupiers. I therefore commend the clause to the Committee.”
“This concession extends the time period for nominating the individual’s main residence. The second allows 24 months of relief where, for specific reasons, a person is unable to occupy a new home for use as their main residence. There is also a change to ensure that, when spouses or civil partners agree to transfer shares in a residential property between themselves, the receiving spouse or civil partner will inherit the transferring spouse’s past use of the property, no matter the use of the property at the time of transfer. This prevents unfair outcomes arising in certain cases. The Government are committed to keeping family homes out of capital gains tax, through private residence relief.”
“This can extend the benefit of relief by up to £40,000 for an individual and £80,000 for a couple, while they are also accruing relief on their current main residence. In order to better target the relief at owner-occupiers, from April 2020 lettings relief will only be available in cases of shared occupancy. The armed forces future accommodation model is also a source of concern. We want to be sure that the clause will extend the benefit of employer-provided accommodation relief to those service personnel who live in privately rented accommodation under that new model. The Government are also legislating on two extra existing statutory concessions. The first applies when an individual has more than one residence, but only one has any real capital value.”