NEW CLAUSE.—(Provisions as to tem- porary residence. (Hansard, 8 July 1924)

Mr. HERBERT
I beg to move, "That the Clause be read a Second time."
I have not much hope that the Chancellor of the. Exchequer will accept this. It is a Clause which is designed to give a little more latitude to foreign visitors to stay here a little longer than at present without rendering themselves liable to Income Tax. The reasons which actuate those who support this Amendment are that at the present time a large number of wealthy foreigners. Americans and others, come over to this country every few years. Many of them want to stop here for more than six months, and they are just the people we want here because they are wealthy and spend a very large amount of money in the country: At present what happens is that before the six months are up they go across to France, Belgium, or some other country on the Continent, and these countries get the benefit of expenditure which we would have got here if they were not in danger of rendering themselves liable to Income Tax. What is suggested is that they should be allowed to stay for a period of 15 months without being liable 2149 to tax, but if they do stay for that time they must not pay another visit to this country—that would render them liable to tax—for a period of ten years or five years. You will preserve your right of taxing these people if they do become residents and attempt to dodge the tax by going away for short periods. I hope the Chancellor of the Exchequer will go into this question and prevent what we see happening every year—large numbers of these people who are spending large sums of money going away and this country losing the benefit of what they would have spent.

Mr. GRAHAM
My hon. Friend, in moving this Clause, indicated that he hardly thought we should be able to accept it, and I am afraid that is the case. I am quite certain he will not accuse any Scotsman in this House, and probably no Englishman, of seeking to do anything to discourage the visits of Americans or others who spend money in this country. We are, however, bound to keep in view the dangers of extension of the present position. If a foreign visitor stay in this country for a period of six months within the year of assessment, he becomes liable for tax, but I ought to explain to the Committee that in practice visitors can come to this country for five months within one year and five months in another year of assessment, or ten or eleven months of our calendar year, without exposing themselves to taxation at all. Probably the practice of making a visit elsewhere would continue in any event. I think there is no real grievance, and I am advised also that if we tried to embody in the Finance Act of this year the suggested Clause, it would be practically unworkable, as it would involve keeping certain records which would be a very difficult matter for the Inland Revenue authorities. Apart from that, the Royal Commission on Income Tax which dealt with this problem took the view, if I remember rightly, that so far from extending facilities it was probably our duty to tighten the grip we have upon the visitor who does acquire residence. In all the circumstances I feel there is no hardship in the existing conditions, and that there is reasonable precaution for the revenue. For these reasons the Chancellor of the Exchequer feels he could not adopt the Clause.

Mr. HERBERT
I beg to ask leave to withdraw the Clause. This Amendment is not designed to assist those people who, in fact, establish a sort of residence here. What I do want to urge is that one gets the answer over and over again in cases of this kind that this is too difficult a question to go into and too complex to be introduced into the Bill this year. The Revenue would do well to try and see if in future years they can get the Government to put forward something or other which would be satisfactory to meet the grievances and troubles involved in these various Amendments.