Tax statute with outdated incapacity definition to be revised

The Low Incomes Tax Reform Group has welcomed the announcement in today’s Budget that the Government will consult on modernising the language used to define an incapacitated person for direct tax purposes.

The language used now is a hang-over from the Victorian age and includes expressions such as ‘lunatic’, ‘idiot’ and ‘insane person’. Such language is clearly offensive and no longer appropriate.

Robin Williamson, Technical Director of LITRG, said:

“We have been campaigning for a change to this legislation for the last eight years. We were therefore delighted when in October last year the Exchequer Secretary committed the Government to changing the definition, and instructed his officials to begin discussions.

“We now look forward to further discussions and to the publication of the consultation document in May 2011.”

Notes to editors

1. LITRG’s efforts to get the definition of an incapacitated person changed were recognised by both the minister and the opposition spokesman during Finance Bill debate in the House of Commons in November 2010 (http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm101108/debtext/101108-0003.htm#10110828001266)
2. The Low Incomes Tax Reform Group (LITRG) is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.