HC Deb 10 May 1951 vol 487 cc2135-7
18. Mr. A. R. W. Low

asked the Secretary of State for Commonwealth Relations whether he has yet received full details from the Government of India about the deduction of Indian tax on pensions paid to residents in the United Kingdom.

Mr. Gordon-Walker

Yes, Sir. Instructions now received from the Government of India are in accordance with the summary referred to in my reply to the hon. Member on 17th April. There are, however, certain points of detail that still remain to be settled. I hope that discussions with the Indian authorities on these points will take place shortly.

Mr. Low

Will the right hon. Gentleman make absolutely sure during the course of the discussions that as a result of this new decision none of these pensioners will suffer more tax than they have had to pay previously under the old arrangements?

Mr. Gordon-Walker

I do not think I can give that assurance. The assurance which I can give is that we will make sure that they only pay just tax and that full allowance is made under the double taxation agreement which we have with India.

Major Lloyd

Will the right hon. Gentleman bear in mind and approach sympathetically the extreme difficulty which many ex-Indian Army officers and soldiers living in the Channel Islands are facing in this problem, and will he do his very best to look after their interests?

Mr. Gordon-Walker

Yes, Sir. That is a complicated matter which I have under consideration.

Mr. Wakefield

Are these pensions paid from Indian revenues?

Mr. Gordon-Walker

Yes, Sir.

Mr. Remnant

Is it not a fact that these men pay both Indian and United Kingdom Income Tax?

Mr. Gordon-Walker

Not at the moment; but that will be the ease. Where that is so, the agreement we have already made with the Indian Government about double taxation will operate. Concessions will be made in United Kingdom Income Tax.

Mr. Keeling

Does the Minister not agree that these pensioners, who have received no compensation for the higher cost of living, will feel, and will have the right to feel, very badly let down if they have to pay any more taxation?

Mr. Low

Is it not a fact that the result of the present double taxation arrangements and the present rates of Indian income tax is to impose the greatest hardship upon the small pensioner? Will the Minister not do something for the benefit of the small pensioner?

Mr. Gordon-Walker

As far as the small pensioner is concerned, the tax, I think, will not be greater. The pension will not attract United Kingdom Income Tax, for example.

19. Mr. Low

asked the Secretary of State for Commonwealth Relations whether Royal Warrant pensions charged to Indian revenues and pensions paid from funds established for the dependants of servants of the former Government of India will, in future, be paid after deduction of Indian tax.

Mr. Gordon-Walker

Royal Warrant pensions are a direct charge on Indian revenues and will in future be issued after deduction of Indian tax. Pensions in issue from funds such as the hon. Gentleman refers to are being paid without deduction pending clarification of the position.

Mr. Low

Are not these Royal Warrant pensions very small ones, and are they not in most cases paid to widows? Is it not the case that at present these pensions do not attract British Income Tax, and that there will be no measure of unilateral double taxation to meet because there is no British Income Tax from which they can be relieved? Must not these people suffer great hardship as a result?

Mr. Gordon-Walker

Most of the pensions are certainly small, and most of them are paid to widows. Where they are small and the only source of income they do not attract United Kingdom Income Tax. Of course, where they are small they will also attract no Indian income tax, or very little.

Mr. H. Hynd

Is any incentive being offered to these pensioners to encourage them to go on working?