53. Mr. Dermot Campbellasked the Chancellor of the Exchequer whether officers of His' Majesty's Forces, normally resident in Eire, pay Income Tax in Eire or in the United Kingdom; and at what rate.
§ Sir J. AndersonThe liability to tax is governed by the Double Taxation Agreement between this country and Eire, to which effect was given by Section 23 of the Finance Act, 1926, and by the war-time concession regarding individuals who come from the Dominions to join the Forces here. Under the Agreement, each country exempts from its own tax persons who are not resident within its territory but are resident in the other country, and in the case of a person who is resident in both countries Double Taxation Relief is given by both countries, which has the effect, broadly, that the total tax payable is the higher of the two taxes. Under the war-time concession, income which was not liable to our tax while the individual was resident in the Dominion is not subjected to our tax by reason of his coming here to join the Forces.
I gather my hon. Friend has in mind the case of a member of the Forces who, before joining the Forces, was resident in Eire and not resident in the United Kingdom. If he is still a resident in Eire—and he may be if, for instance, he maintains residence there and pays visits to Eire—he would be liable to Eire tax but he would not be liable to United Kingdom tax, except on his Service pay, and then only if he were resident here. If he is 1250 not resident in Eire he would be liable to United Kingdom tax but not to Eire tax on his Service pay.
§ Professor SavoryWhy is it that British officers who were resident in the Treaty ports before the cession of those ports to Eire have been asked to pay arrears of Income Tax to Eire, although they had already paid Income Tax to the United Kingdom of Great Britain and Northern Ireland?
§ Sir J. AndersonI will communicate with my hon. Friend on that matter.