I propose to take Questions Nos. 34 and 37 together.
The expected yield from capital acquisitions tax in 1997 is estimated at £50 million. In addition, the combined yield from probate tax and discretionary trust tax is expected to be £22 million.
The Exchequer cost of introducing a single rate of 20 per cent is estimated at £18 million in a full year. In framing policy in this area, I am conscious of the fact that across the board reductions in capital acquisitions tax rates would benefit equally those receiving productive assets and passive assets. In recent years, resources have been focused on reducing the impact of taxes on the transfer of businesses so as to encourage the successful development of enterprises from one generation to the next. In the recent budget I announced that the rate by which business assets can be reduced for capital acquisitions tax purposes is to be increased to 90 per cent. This means that over the last three budgets business relief has been made vary much more attractive. It will, in fact, have been increased from a minimum rate of 25 per cent to the proposed new rate of 90 per cent. This increased relief will also apply to transfers of agricultural property. It is my view that this targeting of reliefs on the transfer of assets which are likely to assist in the creation of employment is preferable to introducing one single rate of capital acquisitions tax for gifts and inheritances.
It is unclear to what tax avoidance practices the Deputy is referring. Under the capital acquisitions tax code the charge is imposed on immovable property as well as the beneficiary to ensure compliance.