§ 67. Sir WILLIAM DAVISONasked the Secretary of State for the Colonies whether his attention has been called to the case of persons domiciled and resident. in Great Britain Who possess property situate both in Great Britain and Southern Ireland, but the bulk of whose property is situate in Great Britain; whether he is aware that such persons, having paid Super-tax to the revenue authorities in Great Britain, have had demands made upon them by the Irish Free State to pay a second Super-tax to the revenue authorities in Southern Ireland and have been informed that, if they do not make an immediate return 885 for Super-tax of their income from all sources to the revenue authorities in Southern Ireland, those authorities will proceed themselves to make an assessment on such persons for Super-tax according to the best of their own judgment; and whether His Majesty's Government will make representations to the Irish Free State on the subject?
Mr. GRAHAMAs the hon. Member is aware, the establishment of the Irish Free State as a separate Dominion with a separate system of taxation, involves the consequence that income derived by a resident in Great Britain or Northern Ireland from sources in the Free State (or vice versa) may be taxable in both countries. Under the law in force in this country a person resident outside Great Britain or Northern Ireland, but deriving an income exceeding £2,000 from sources liable to British Income Tax, would be liable to make returns for and to be assessed to British Super-tax, and I understand that the law in the Irish Free State is similar. There is, therefore, no ground for making representations to the Irish Free State Government in the circumstances referred to in the question. I may add that under the arrangements between this country on the one side and the Irish Free State on the other for giving relief in respect of double taxation, the effective rate of Super-tax charged is taken into account in determining the individual's appropriate rate of tax for purposes of relief. For further details I may refer the hon. Member to a statement circulated in the OFFICIAL REPORT on the 10th July, 1923 (Vol. 166, cols. 1158–60).
§ Sir W. DAVISONDo I understand that, in accordance with the arrangement made between the British and the Free State Governments, the individual referred to in the question ought not to have been asked to make a return of all his property in Great Britain to the Irish Free State authorities?
Mr. GRAHAMNo, the hon. Member is under a misapprehension on that point. The return falls to be made. It is part of the duty of the revenue authority, but the party is liable to be taxed at the higher of the two rates in the two countries, but at no more, and that rate is determined by adjustment under the terms of the arrangement given in the reply of 10th July, 1923.
§ Lieut.-Colonel HOWARD-BURYDoes it not mean that the individuals have to pay Super-tax to each of the Governments and then obtain rebates from each of the Governments, and cannot the Treasuries make some arrangement between themselves whereby only one Super-tax is paid and the amount divided up between the two Governments?
Mr. GRAHAMI entirely agree that the present system is very complicated, and it is very difficult to explain, but if my hon. Friends will not press me on that further at the moment, I would say to the House that this is under consideration, and if we can simplify it, I shall be delighted.
§ Mr. ORMSBY-GOREWill the hon. Gentleman work this out by the time the Committee stage of the Finance Bill is reached, because new legislation may be necessary if any alteration of the present system is made?
Mr. GRAHAMYes, legislation would be required, and I could not promise that at the moment; but the thing may be capable of administrative re-arrangement without alteration of the Act of Parliament.
§ Sir F. WISEWill the hon. Gentleman form a Committee to go into this difficult problem, on the lines of the Report of the Royal Commission which reported in 1919–20?
Mr. GRAHAMNo, I hardly think A Committee is required. It is quite a clear point of double taxation.
§ Mr. MAXTONWill the hon. Gentleman assure us that, while the necessary steps are being taken to remove the anomalies, cases of particular hardship will be relieved?