Downing Street Says

» Monday, July 9, 2007

Tax

Asked why the Prime Minister did not believe that marriage should be supported through the tax system, the PMS replied that marriage was supported through the tax system. For example, inheritance tax, as that related to assets that had been built up jointly by couples over a lifetime. The PMS said that he could not comment on specifics of proposals from the Opposition party.

Asked to clarify if the Prime Minister believed that in principle, it was ok for the tax system to support marriage as an institution, as it did so already with inheritance tax, the PMS replied that in the Prime Minister’s mind, in relation to the taxation of assets, these were assets that were built up over a lifetime by couples. That was a long standing principle in the tax system. The issue of individual taxation on income was also a long standing principle, dating back to the 1980s which the Prime Minister also supported.

Put that if people looked at tax credits, they were a strong incentive to split up the tax credit system, as people could get much more money if they did that, and did that trouble the Prime Minister, the PMS said that the Prime Minister was quite happy with the current system of tax credits.

Put that only 6% of estates were liable for inheritance tax, which meant that very few married couples would pay this, and wasn’t this a reflection of supporting marriage, the PMS replied that for 94% of people, their estates were not eligible for inheritance tax, and therefore did not pay inheritance tax in the first place. For those that did, marriage was recognised.

Asked further about inheritance tax and what happened when a partner died, the PMS said that their assets would be transferred to the partner tax free, so in that sense, marriage was recognised in the tax system.

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Tax

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