End Of ‘Disappearing Trick’

Press, Volume XCV, Issue 28250, 11 April 1957, Page 13

End Of ‘Disappearing Trick’

(Rec. 10 pjn.) LONDON, April 10. The Chancellor of the Exchequer, Mr Peter Thorneycroft, said in his Budget speech that he intended closing a loophole in the estate duty law to put a stop to a device known as “the disappearing trick.’’ Previously, death duty was payable on gifts made in the five years before the donor died, but if the gift no longer existed at the time of death, no duty was payable. This applied, for example. to securities due to be cashed within the five years before death. Now duty will have to be paid.

The Opposition is expected to be strongly critical of the Budget when debate on its provisions begins today, on the ground that it does little for poorer people. Mr Thorneycroft’s concessions were designed mainly to provide incentives for the middle and professional classes. In spite of the promised £lOO million tax reduction, the Budget provided for a surplus of £462 million. The main concessions were:— Tax relief on a sliding scale for people in the £2OOO to £lO,OOO income groups. Immediate abolition of the “Suez shilling”—a Is tax on petrol imposed with rationing after the Suez action last year. Ending of entertainment tax on “live” theatre and all sport. Cuts in purchase tax on some household goods, including a 15 per cent, reduction on kitchenware and floor coverings. Tax relief for old people, parents with children at school, and British companies operating overseas. Cuts in the entertainment taxes which picture theatres have to pay. Help for the shipbuilding industry by raising untaxed capital expenditure limits to 40 per cent, from 20 per cent. On the other side, the annual cost of a combined radio and television licence will go up £1 to £4. Radio licences (£1 a year) remain unchanged.