§ (1) Subject as hereinafter provided, no allowance in respect of earned income, and no deduction from assessable income, shall be given or made, and Income Tax on the first two hundred and twenty-five pounds of the taxable income shall not be chargeable at the reduced rate, under the foregoing provisions of this Part of this Act, and no relief shall be granted under Section thirty-two of the Income Tax Act, 1918, in the case of any individual who is not resident in the United Kingdom:
§ Provided that the foregoing provision shall not apply in the case of any individual who satisfies the Commissioners of Inland Revenue that he or she—
- (a) is a British subject; or
- (b) is a person who is or has been employed in the service of the Crown, or who is employed in the service of any missionary society or in the service of any native State under the protection of His Majesty; or
- (c) is resident in the Isle of Man or the Channel Islands; or
- (d) has previously resided within the United Kingdom and is resident abroad for the sake of health; or
- (e) is a widow whose late husband was in the service of the Crown;
§ (2) Any person who is aggrieved by a decision of the Commissioners of Inland Revenue under this Section may appeal to the Special Commissioners.
§ Mr. G. LOCKER-LAMPSONI beg to move, in Sub-section (1, d) at beginning, to insert the words "is a person of British birth and." 1553 Under paragraph (d), apparently the Chancellor is going to allow a person who is not of British birth, and leaves the United Kingdom and goes abroad for the sake of his health, to obtain relief. I do not quite see why we should give relief to a person who is not a British subject and leaves this country and very likely goes back to his own country. I do not know whether that is intended. My Amendment would safeguard an English-woman who has married someone who is not a British person. It is quite right if she goes abroad for her health that she should have some relief, but I do not see why we should give a privilege to a person who is not of British birth.
§ Mr. BALDWINI hope my hon. Friend will not press this Amendment. It is a distinction which has not been made before in regard to this matter, and I can see no valid reason why a person who does not happen to be of British birth, a resident of this country, and who takes up foreign residence bonâ fide and approved by the Commissioners of Income Tax, should be deprived of this benefit. It appears to me there would be something invidious in putting into the statute in a case of this kind a disfranchising Clause, as it were, against bonâ fide residents in this country. I can quite understand my hon. Friend's feelings, because many of us still feel that we do not want any advantages which are given to English people to be given to Germans, but it is not necessarily Germans. There are genuine cases of people who have lived in this country for the best part or all their lives who belong to friendly and Allied nations, and I do not think we ought to put them into a statute in this way, taking from them a privilege which is enjoyed by all others who are resident in this country if and when the circumstances arise. I can assure the hon. Member the point is a very small one indeed, and the cases which would be ruled out by his Amendment are infinitesimal in number.
§ Sir D. MACLEANI am not surprised at my right hon. Friend's statement, because he and I worked together for seven years on Committees which, although they might reveal to us the dangers of many aliens in this country, at the same time made very clear the very large number of residents in this country who, although aliens, and indeed 1554 technically enemy aliens, were very good citizens indeed, and if this Amendment was allowed to be inserted, really it would make the position somewhat ridiculous. A person previously residing in the United Kingdom who only left this country for the sake of his health. So that he could not under normal circumstances safely reside here any longer. That is the position. What is proposed to be added is that he should also be a person born in his country. I learnt in the course of my experience in those Committees that many people who were born in this country were very bad citizens indeed, and, further, that many of them were actually allied with our enemies. The more you analyse what these apparently simple words mean when you come down to the actual experience of those who know what they have meant, the more one feels gratified that my right hon. Friend is disinclined to accept the Amendment.
§ Sir H. NIELDThe occasion has afforded my right hon. Friend another opportunity of demonstrating the affectionate regard with which he holds the subjects of other countries.
§ Colonel WEDGWOODThe liberty of England!
§ Sir H. NIELDThe liberty of England is dead as a door-nail. The liberty of Bolshevik Russia! The Committee knows my views, and I am not prepared to support the suggestion of my hon. Friend, but I think the right hon. Gentleman (Mr. Baldwin) would be wise to put some limit as to what residence means—"has previously resided continuously for five years" or whatever he chooses to term it so as to get hold of a person who has, at any rate, resided for a definite time here. We have had quite enough of the birds of passage who come here for mischief, and I do not see why we should allow the Finance Bill with these exemptions to be used, as it undoubtedly will be used, by the slim personages who cross for the purpose of mischief, and are crossing, and are making a good deal of the trouble which we have to contend with now in all parts of the Empire. I sincerely hope, whilst I do not associate myself with the idea that a bonâ fide resident, though born in a foreign country, who has been here for a definite 1555 time, should be excluded. I think there should be some limit put on.
§ Amendment negatived.
§ Mr. G. LOCKER-LAMPSONI beg to move, in Sub-section (1, d) to leave out the word "health" ["for the sake of health"] and to insert instead thereof the words "of his own health or that of his wife."
This is the case of a man who goes abroad for the sake of his wife's health. It seems to me only reasonable. You treat the income of a man and wife as one, but if he is compelled to live abroad for the sake of his wife's health, you do not treat it as his own health, as you ought to. If you treat both incomes as one, you ought to treat the case of the wife's health as though it were the man's health for the purpose of living abroad. The right hon. Gentleman will probably say it will lead to fraud and evasion, but I think it will be quite easy to get a doctor's certificate to show bonâ fides. It seems to me a very reasonable Amendment.
§ Mr. BALDWINMy hon. Friend will be relieved to hear that the words
is resident abroad for the sake of healthhave always been interpreted as meaning the husband or the wife. I have no objection to inserting the proposed words.
§ Captain W. BENNWe are in danger by this Amendment of doing less than before. The words "is resident abroad for the sake of health" have been understood in administration to be for the sake of the health of the man, his wife or his family. By including the specific words now proposed it may well be that the authorities may not make an allowance in respect of people who are resident abroad because they may have sick children. We ought to consider this matter carefully.
§ Mr. LOCKER-LAMPSONI see the point raised by the hon. and gallant Member, and I certainly do not want to do anything that will exclude anybody from the benefit of the Bill; but I should like to see these specific words made statutory. The words might be "is resident abroad for the sake of his own health or the health of his wife or children."
§ Captain BENNSupposing a man of small means lives abroad with his mother. She might be excluded even by the amended words suggested. When the Financial Secretary to the Treasury says the words now in the Bill are read by the Department in the widest possible sense, it will be better to leave them as they are rather than have them limited.
§ Mr. BALDWINPerhaps my hon. Friend, in view of what has been said, would be content to withdraw this Amendment. I will undertake to look into the matter, and if I find that the words in the Bill give everything that my hon. Friend desires I will say so on Report, but if not, and the words he proposes can be inserted on Report without having any prejudicial effect, I will agree to insert them.
§ Mr. LOCKER-LAMPSONOn that understanding, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Colonel WEDGWOODThis Clause exempts from rebates people resident abroad who are not British subjects. Are Indians British subjects in the sense that they are entitled to rebates if they hold shares in English companies? We ought to facilitate the investment of money in British companies. There are at the present times countless reasons why companies should register themselves in India or East Africa or elsewhere. Are we giving the very best terms to people who invest in British companies? Indians must be British subjects and, therefore, they will be entitled to these rebates, even though they never come to England. How about Egypt? If Egyptians invest in British companies are they to be deprived of any chance of securing rebates? Are those countries which are under our mandate excluded from the privilege of securing rebates? It ought to be our object to make the whole of the British Empire uniform in this respect and to see that everybody under the British flag has the same rights. I want to be quite certain that all British subjects, whether they are technically British subjects or practically British subjects in protectorates or elsewhere, have the privilege of investing 1557 in British companies and securing rebates. I want to see that nothing is done to check people who live in our protectorates or our mandated areas from investing in British companies. We must make it quite clear that the wider the circle of the Empire and the wider the number of British citizens the wider is the complete comity of the nation, and that we are doing nothing whatever to restrict companies from registering in the United Kingdom when they have so many incentives to register themselves in the Channel Islands, in India, or in East Africa, where they escape from our penal law.
§ Mr. BALDWINThe answer to the hon. and gallant Member is that, subject to the limitations expressed in the Clause, the term "British subject" covers a British subject in whatever part of the British Empire he may be residing.
§ Colonel WEDGWOODThat does not include mandated territories?
§ Mr. BALDWINNo.
§ Colonel WEDGWOODNor Egypt?
§ Mr. BALDWINNo.