Rolling over
THE Chancellor's prompters, in the wings at the Treasury, scratch their heads. Can they take him through the old scripts again? Another speech in praise of high interest rates as the reward for thrift? Another National Savings gadget like the Capital Bond last year — the only invest- ment where you have to pay tax for four years before you get your dividend? Come off it, and in any case, who needs to have savings channelled into the public sector, which has got money coming out of its ears? The private sector, the company sector, needs the money — to pay for all that splendid expansion and investment of the last few years, and to get the banks off its back. How are we going to stimulate that? Another go at PEPs — Personal Equity Plans, the plain man's way to own shares? Well, let's make it plainer. Let's scrap the rules which limit people in using PEPs to buy into unit trusts or investment trusts. Those are the right places for first-time investors' money, and though the rules had a point, they have outlived it. Capital Gains Tax? Now you're talking. The top rate is the highest it has ever been, and a unique deterrent to the plain man and the ordinary shareholder. To others, it is optional. The stockbroker who sells his firm and buys a farm the landowner who runs up a housing estate, the chairman who takes a bid for his family business — none of them is taxed on his capital gains, so long as the money is reinvested in another business. (Pension funds, of course, escape altogether.) This is called rollover relief. Why not let shareholders roll over, taxing them only when they take the money out to spend it?
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