§ MR. MACFARLANEasked the First Lord of the Treasury, If it is the case that a person residing in England investing money in Indian or other securities, outside of the United Kingdom, and drawing no portion of the income arising from such investment in this Country, is free from liability to Income Tax in respect of such income, and if a person, also residing in this Country, but employing an equal amount of capital in trade or any industry in India or elsewhere, producing an equal income, no portion of which is brought into the United Kingdom, is held to be liable in respect of the whole of such income, if he can state upon what principle the distinction is made in favour of the investor and against the trader?
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)Sir, my right hon. Friend the Prime Minister has asked me to answer this Question. If by the word "securities" the hon. Gentleman means, as I presume he does, securities falling within Schedule D, they are not, in either of the cases supposed, liable to Income Tax. But a 1334 trader living in the United Kingdom is liable to pay Income Tax on all profits arising from his trade wherever those profits accrued; and this principle was embodied in Mr. Pitt's Income Tax Act of 1805, Sir Robert Peel's of 1842, and in that of 1853. I cannot find any discussion on the subject in the reported debates; and I presume that the impolicy of attempting to discriminate between trade profits made in one country or another was universally admitted.