Asked by: Lord Lee of Trafford (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to the Written Answer by Lord Livermore on 13 July (HL1420), whether they will now answer the question put, namely what estimate they have made of the revenue implications of levying capital gains tax at the same rate as income tax.
Answered by Lord Pitt-Watson - Parliamentary Secretary (HM Treasury)
The Government does not comment on tax speculation outside of fiscal events. The Government keeps the tax system under review, and decisions on tax policy are taken by the Chancellor at a fiscal event.
Asked by: Lord Lee of Trafford (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what estimate they have made of the revenue implications of levying Capital Gains Tax at the same rate as Income Tax; and what plans they have, if any, to equalise rates of Capital Gains Tax and Income Tax.
Answered by Lord Livermore
The Government has taken significant steps to reform Capital Gains Tax (CGT), including increasing the main rates of CGT from 10% for basic rate taxpayers and 20% for higher rate taxpayers to 18% and 24% respectively. The rates for Business Asset Disposal Relief and Investors’ Relief have also increased to 18% for disposals made on or after 6 April 2026. This has created a simpler system by aligning rates across property and other assets.
The Government has also reduced the CGT relief available for disposals to Employee Ownership Trusts (EOTs) from 100% to 50%.
CGT currently raises around £14 billion a year, and receipts are expected to more than double to around £35 billion by 2030-31.
As with all taxes, the Government keeps the tax system under review, and decisions on tax policy are taken by the Chancellor at the budget.
Asked by: Lord Lee of Trafford (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what plans they have to allow grandparents to open Junior ISAs on behalf of their grandchildren.
Answered by Lord Livermore
Individual Savings Accounts (ISA) rules are clear that only someone with parental responsibility for the child may open and manage a Junior ISA (JISA). This helps prevent more than one JISA of each type (cash or stocks and shares) being opened in error and ensures that there is a single point of contact for the giving of instructions. A grandparent who does not have parental responsibility is therefore unable to open or manage a Junior ISA on behalf of their grandchild.
While only parents or legal guardians can open a JISA on behalf of their children, grandparents can then add funds to the account, up to the value of £9,000 a year.
As with all aspects of the tax system, the Government keeps the JISA policy under review.
Asked by: Lord Lee of Trafford (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government how many people are employed by the Financial Conduct Authority.
Answered by Lord Livermore
This is a matter for the Financial Conduct Authority (FCA), which is operationally independent from Government. The FCA will respond to the Noble Lord by letter, and a copy of the letter will be placed in the Library of the House of Lords.
Employment figures for the year ending March 2025 can be found in the FCA’s Annual Report and Accounts: https://www.fca.org.uk/publication/annual-reports/annual-report-2024-25.pdf
Asked by: Lord Lee of Trafford (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government how tax relief through independent savings accounts allowing investment overseas contributes to (1) the UK economy, or (2) the growth agenda.
Answered by Lord Livermore
The Government is committed to incentivising greater saving and investment, to help people save for their future goals and build greater financial resilience. The Government offers a generous tax treatment on Individual Savings Accounts (ISAs) to support people of all incomes and at all stages of life to save.
Individuals can currently save or invest up to £20,000 per year in an ISA, with all income and gains received in the wrapper received tax-free.
The Financial Services Growth & Competitiveness Strategy Call for Evidence, which closed on 12 December, asked how increasing retail participation in capital markets could support long-term sustainable growth within the sector and the wider economy. The call for evidence welcomed further evidence on how to improve consumer engagement with investing, and the Government is considering the feedback provided.
The Government is looking at options for reforms to ISAs that get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission.
The Government keeps all aspects of tax and savings policy under review.
Asked by: Lord Lee of Trafford (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what plans they have to increase domestic ownership of UK equities.
Answered by Lord Livermore
The Government wants to see more consumers participate in capital markets and benefit from the long-term financial security that investing can provide.
The Financial Services Growth & Competitiveness Strategy Call for Evidence, which closed on 12 December, asked how increasing retail participation in capital markets could support long-term sustainable growth within the sector and the wider economy. The call for evidence welcomed further evidence on how to improve consumer engagement with investing, and the Government is considering the feedback provided.
More broadly, the Government is committed to boosting our capital markets to deliver growth across the UK and is pursuing ambitious reforms to make our markets even more competitive. For example, reforms to the Prospectus rules will give investors, including retail investors, access to better quality information and so participate more easily in the capital raising process. The Government is also working with the FCA to review the boundary between financial advice and guidance, to ensure consumers get the support they need to make decisions about their finances.
The Pensions Investment Review has put forward ambitious proposals to reform the UK pension system, which includes encouraging further pension investment into UK assets to boost growth across the country, and will publish its final report in the Spring.
Asked by: Lord Lee of Trafford (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of whether banks and insurance companies are discriminating against defence firms; and what steps they intend to take in response.
Answered by Lord Livermore
HMG has been actively engaging with the defence industry, trade associations and the financial services sector regarding access to financial services for defence companies.
Decisions regarding the provision of financial services to businesses are primarily a commercial decision, where banks and insurers will need to make an assessment of the relevant risks and conduct appropriate due diligence.
In a time of increasing geopolitical instability, maintaining a robust and thriving defence sector is essential to our national security. No company should be denied access to financial services purely on the basis that they work in Defence.
This Government is committed to bringing forward a Defence Industrial Strategy which ensures the imperatives of national security, and a high-growth economy are aligned. The Defence Industrial Strategy Statement of Intent, published in December 2024, recognised issues with regards to access to finance, including opening bank accounts or securing a loan. HMG is consulting with a wide range of stakeholders, including defence suppliers and financial institutions, to assess the ways in which we can reduce barriers and create a strong and resilient defence sector. We continue to invite all stakeholders to respond to the Defence Industrial Strategy Statement of Intent, either publicly or privately, by 28 February 2025.
Asked by: Lord Lee of Trafford (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what estimate they have made of (1) the number of additional taxpayers who will have to complete Capital Gains tax returns as a result of the proposed reduction in threshold, (2) the amount of additional tax revenue that is likely to be raised, and (3) the extra cost of administration that will be required as a result of those changes.
Answered by Baroness Penn
A measure was announced at Autumn Statement 2022 to reduce the annual exempt amount (AEA) for capital gains tax (CGT) to £6,000 for tax year 2023 to 2024, with a further reduction to £3,000 for tax year 2024 to 2025 and subsequent tax years.
In 2024 to 2025, 260,000 individuals and trusts are estimated to be brought into the scope of CGT as a result of the measure.
However, some of those taxpayers brought into the scope of CGT would already have been expected to complete the capital gains tax supplementary pages within Self Assessment for the following reasons:
The amount of additional tax revenue that is expected to be raised as a result of the measure is set out in the table below:
Tax Year | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 |
Exchequer impact (£million) | 0 | +25 | +275 | +425 | +435 | +440 |
These figures are set out in table 5.1 of Autumn Statement 2022 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Autumn Statement 2022 which is available on the gov.uk website.
A cost in the region of £100,000 will be incurred in delivering the relevant IT changes to support safe implementation of this measure. HMRC also expects to receive additional contact from customers who require support as a result of this change.
Asked by: Lord Lee of Trafford (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the Written Answer by Baroness Penn on 28 February (HL6497), what assessment they have made of whether giving grandparents with written parental approval the ability to open a junior ISA on behalf of a grandchild would significantly increase the number of such ISAs taken out, in line with their policy objective.
Answered by Baroness Penn
Junior ISAs (JISAs) form a key part of the Government’s commitment to ensuring that young people are supported to save from an early age and into adulthood. Since the launch of the JISA in 2011, the number of accounts being subscribed to each year has increased significantly. In 2019-20, over 1 million JISAs were subscribed to on behalf of children across the UK.
The Government wishes to ensure that the ISA regime remains simple and sustainable for both savers and providers. Placing a restriction on who can open and manage a Junior ISA (JISA) helps to prevent more than one account of each type (cash or stocks and shares) being opened in error and ensures that there is a single point of contact for the giving of instructions. Removing this restriction would increase the risk of multiple accounts being opened and subsequently needing to be made void. A grandparent who does not have parental responsibility is therefore unable to open or manage a Junior ISA on behalf of their grandchild.
While only parents or legal guardians can open a JISA on behalf of their children, grandparents can add funds to the account, up to the subscription limit of £9,000 per year. Grandparents may also open an adult ISA in their own name to save and invest for their grandchildren, which can later be gifted outside of an ISA.
The Government continues to keep all aspects of savings policy under review.
Asked by: Lord Lee of Trafford (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what are their reasons for preventing grandparents from opening Junior ISAs for their grandchildren; and what assessment they have made of the compatibility of this prohibition with their policy of encouraging people to save more.
Answered by Baroness Penn
The Government is committed to ensuring that young people are supported to save from an early age and into adulthood. Junior ISAs (JISAs) form a key part of this commitment.
Where a JISA is opened on behalf of a child, the account must be set up and managed by an individual with parental responsibility for that child, or the child itself if over 16. To ensure that the ISA regime remains simple and sustainable, placing a restriction on who can open and manage an account prevents more than one Junior ISA of each type (cash or stocks and shares) being opened in error and ensures that there is a single point of contact for the giving of instructions. A grandparent who does not have parental responsibility is therefore unable to open or manage a Junior ISA on behalf of their grandchild.
However, the Government recognises the important role that grandparents can play in building a savings pot for their grandchildren. While parents or legal guardians must open a JISA on behalf of their children, grandparents and others can then add funds to the account, up to the value of £9,000 a year.
The Government continues to keep all aspects of savings policy under review.