§ The time limit imposed by Sub-section (2) of Section seventy-one of the Finance (1909–10) Act, 1910, which grants relief to persons not resident in the United Kingdom in respect of Income Tax on the interest or dividends of any securities of a foreign State or British Possession, shall be extended from six months to three years.
§ Clause brought up, and read the first time.
§ Mr. G. LOCKER-LAMPSON
I bog to move, "That the Clause be read a second time."
At present only six months is allowed after the end of the year in which Income Tax is charged within which a claim may be made in respect of deduction of Income Tax on the income arising from securities in a foreign State or British Possession in the case of the person owning them being resident outside of the United Kingdom. The dividends are paid over here. The issue is probably through a British bank and paid through that bank for the sake of convenience. Under the Income Tax law the paying bank is compelled to deduct the tax before the money is paid, whether the person is actually liable or not and quite irrespective of where the person resides. My point is that the limit of six months is often very unreasonable as the limit within which a claim for abatement may be made. In practice a large number of people lose the tax which has been deducted, and which in 308 reality they are not liable to pay. For instance, take the case of a person resident in Australia or New Zealand with stocks of the description I have mentioned, the Income Tax being collected here by the bank. The dividend may be placed in the man's account towards the end of March and the bankers may advise him that the tax has been deducted. The man cannot possibly receive that information until well into May. I am very glad I have the privilege of putting my case before the Chancellor of the Exchequer. The man may be away from home at the time. He has to write to Somerset House for a form of claim, and that takes another six weeks. Probably there is a delay of a week at Somerset House, and another six weeks elapses before the man in Australia or New Zealand receives the form. He has to complete it and go before a justice of the peace or magistrate and swear as to the form which is returned to Somerset House. That makes altogether twenty-four weeks out of the twenty-six, even if everything is dealt with by return of post.
§ Sir J. SIMON
Perhaps it may save the time of the House if I state I am going to accept this new Clause in the form in which it is moved.
§ Sir J. SIMON
I am prepared to accept this new Clause. The matter is very simple. Suppose interest or dividend on securities of a foreign State or British Possession are paid in London, as I am 309 glad to think many of them are, and supposing that they are payable to persons who are not resident in the United Kingdom, though the Income Tax is deducted at the source the person entitled to the income or dividend, since he is not resident, is entitled to have it back. Under the existing law he has to claim it within six months, and I am quite prepared to agree that he ought to be given a longer term.
§ Clause read a second time, and added to the Bill.