Below is the text of Mr Major’s Parliamentary written question on Secondhand Bonds, published on 24th June 1982.
Mr. Major Asked the Chancellor of the Exchequer if he is satisfied with the present tax treatment of secondhand bonds; and whether he will make a statement.
Mr. Ridley Advantage has been taken of existing tax provisions to avoid income tax on the profits on certain life policies and life annuity contracts.
Sections 393 to 402 of the Taxes Act –
There has been a serious and, in recent weeks, growing exploitation of these provisions by means of the device known as secondhand bonds under which individuals have been purchasing such policies and contracts from intermediaries thereby avoiding income tax on any ultimate profits on the investment.
The Government have therefore decided to introduce legislation in next year’s Finance Bill to amend sections 394(4) and 396(2) with effect from midnight on Friday 25 June 1982. An assignment thereafter for money or money’s worth of any policy or contract –