§ 59. Mr. Lowasked the Chancellor of the Exchequer whether he is aware that long-service pensioners of the fighting Services now residing in the dollar area have to pay a higher rate of taxation on their pensions since devaluation; and whether he will alter the method of computation which produces this result.
§ Sir S. CrippsI assume the hon. Member is referring to a case in which the pensioner has income from dollar sources in addition to his pension. Under present law a non-resident Service pensioner, like non-resident British subjects in general, pays tax on his United Kingdom income at the effective rate appropriate to his total income, which is necessarily and properly computed in terms of sterling. I cannot agree that devaluation affords any ground for altering the law.
§ Mr. LowDoes not the right hon. and learned Gentleman agree that these people have to pay more tax and, therefore, have less pension to enjoy because they have to pay more tax, and that they also have less pension to enjoy by reason of devaluation? Does he not think that this is very unfair, and ought he not to look into it again?
§ Sir S. CrippsNo, Sir. It has been looked into, but it is the general law which is applicable not only to pensioners but to everybody abroad, and when the value of money alters, one still has to make Income Tax calculations in sterling and not in some foreign currency.