§ 84. Captain Cobb
asked the Chancellor of the Exchequer whether he will give early consideration to a re-allocation as between the British and Colonial Treasuries of taxation on the profits made by companies operating in the Colonies and registered in Great Britain.
§ The Financial Secretary to the Treasury (Mr. Assheton)
I assume that my hon. Friend's Question refers to the scheme for the relief of double taxation within the Empire. As my right hon. Friend the Chancellor of the Exchequer previously stated, we may make an arrangement with the United States on somewhat different lines from the Empire scheme, and in that event, as I pointed out during the Finance Bill Debates last June, it will clearly be necessary to consider the repercussions on the Empire scheme. My right hon. Friend is not, however, in a position to make any further statement at present.
§ Captain Cobb
Is it not a fact that these profits are not taxed in the Colonies, and that the Colonies derive no benefit at all from these profits earned in the Colonial territories?
§ Mr. Assheton
No, Sir; that is not quite the position. It is, however, a most complicated matter and would involve a very lengthy explanation.
§ 85. Captain Cobb
asked the Chancellor of the Exchequer whether holders of British Colonial stock resident in Great Britain pay full British Income Tax on dividends derived from this stock but pay no income tax to the Colony which issued the stock.
§ Mr. Assheton
A person resident in the United Kingdom is liable to United Kingdom Income Tax on his total income from all sources, subject to the qualification that the assessment on income from sources outside the United Kingdom is based on remittances to the United Kingdom instead of on the full amount arising abroad in the case of a person not domiciled in the United Kingdom or a British subject not ordinarily resident in this country. Whether dividends on holdings of Colonial Government stocks are liable to Colonial tax in the hands of a United Kingdom resident would depend on the terms of issue of the stock and the Income Tax law of the Colony concerned, but I understand that generally speaking such dividends are exempted from Colonial Tax in the hands of a person not resident in the Colony.