DOUBLE TAXATION RELIEF (Hansard, 31 July 1947)

§ Mr. Charles Williams (Torquay)
I feel sure that the Financial Secretary would like to give us some information on the amount of relief that will be given, first, so far as the taxpayers of this country are concerned, and, secondly, so far as 752 these Islands are concerned. They are not very wealthy Islands. I feel, therefore, that there must be some reason for bringing forward these Orders, and it would be useful if we could have a word of explanation. I think that the House generally would like some information. It would be a novelty at any rate if we could hear something about any proposed reliefs. That is why, with considerable respect, I ask the Financial Secretary to give us some information on a part of the British Empire which is occasionally neglected by us, but which is not going to be neglected tonight.

§ The Financial Secretary to the Treasury (Mr. Glenvil Hall)
As the House will have gathered, this is one of seven Orders which we are asking the House to approve tonight to bring into operation double taxation agreements with these territories. I am afraid that the hon. Member for Torquay (Mr. C. Williams) was not quite correct when he said it would be a novelty to have one of these explained. We have had them explained so often—they have all more or less followed the same pattern—that I thought it would be a waste of the time of the House to offer to explain them unless someone asked for some observations to be made. We are making these agreements with a number of Dominions, Colonies and foreign countries in turn, and it is quite impossible for me to say how much relief is involved. Quite frankly that is not the point in making them; they are being made generally not only with the Dominions and with other countries like the United States, but with the Colonies, and even if they only help a few people it is well worth making one of these agreements.
As I have said, they follow the pattern of the agreements made with the Dominions and the U.S.A., which only differ from those made with the Colonies in the treatment given to pensions of Government servants. In the agreements with the United States, Canada, and South Africa these were taxed only by the Government who paid the pension. In the Australian and New Zealand agreements they are taxed only in the country of residence of the recipient. In these Colonial agrements they are going to be taxed by the paying Governments in all cases, but they can also be taxed in the country where the recipient lives. Where a person is taxed twice in that way, the 753 United Kingdom Inland Revenue will allow credit for what has been paid in respect of Colonial taxes.

§ Mr. Keeling (Twickenham)
Will not the effect of some of these double taxation agreements with the Colonies be that the present liability to pay tax to the United Kingdom will become a liability to pay tax to a colony? If that is so, will not tax reserve certificates which have been accumulated to pay United Kingdom tax become in some cases unusable? Is it proposed to make some agreement so that such tax reserve certificates can be used in the colonies instead of in this country?

§ Mr. Glenvil Hall
I am afraid I do not follow the point being made by the hon. Gentleman. Is he referring to postwar credits?

§ Mr. Keeling
No. I presume that the right hon. Gentleman knows what a tax reserve certificate is. I am saying that tax reserve certificates which have been accumulated in order to pay tax in the United Kingdom will become unusable because the tax will not be payable in the United Kingdom under this agreement, but to the Colony. Therefore, is it contemplated that some arrangement shall be made with the colonies that these tax reserve certificates should become available in the colonies?

§ Mr. Glenvil Hall
If injustice of that kind arose, steps would be taken to regularise the position and to see that no hardship was incurred by the individual because, on account of this agreement, he failed to realise tax reserve certificates.