§ The Earl of Kimberley
asked Her Majesty's Government:
Further to their answer of 18th April (H.L. Deb., col. 98), whether their decision to grant no indexation relief whatever in respect of disposals of deposit-based unit trusts and offshore funds after Budget Day is consistent with the way in which dependent relative relief was withdrawn in 1988; and whether they have other grounds for considering that it is not retrospective apart from their contention that it follows established practice.
The Earl of Caithness
The retention of capital gains tax relief for homes provided for dependent relatives before 1988 was an exception to the general principle that capital gains changes, whether reducing or increasing liabilities, apply to disposals on or after the date they come into effect, including disposals of existing assets. The exception recognised the fact that some of those affected would have made long-term financial plans—for example for the eventual repayment of a mortgage on the home concerned—on the basis that the relief would be available. For similar reasons relief for mortgage interest was retained for homes provided for dependent relatives before 1988.