§ 36. Mr. Gough
asked the Chancellor of the Exchequer if he is aware that moneys deposited in this country by foreign nationals resident abroad are subject to Estate Duty in the event of the death of the depositor, even though such death occurs outside the limits of the United Kingdom; and what consideration he has given to an amendment of the law in this matter.
In general, subject to exceptions in favour of certain Government securities and in some cases to the provisions of double tax agreements, Estate Duty is payable on property situated in this country, including money deposited here, regardless of the domicile or place of death of the owner. I have no proposals at present for amendment of the law on this point.
§ Mr. Gough
Does my right hon. Friend agree that this situation creates an unnecessary handicap on our balance of payments situation? Further, does he agree that considerable sums of money—particularly from people from the Middle East—are now leaving the sterling area because of this situation and are being deposited either in Swiss francs in Zurich or in dollars in New York? Will he see whether it is possible to change the situation?
I agree with my hon. Friend that those aspects of the problem are very important indeed. I will certainly look into the problem generally with those points in mind. In the meantime, if he has evidence which he could give me which would help in my considerations, I shall be very glad to have it.
§ Mr. Gough
Would my right hon. Friend be surprised if I told him that a certain individual from the Middle East deposited as much as £3 million in this country? [HON. MEMBERS: "Why?"] Because of the strength of this country. He then died in the Middle East and this deposit suffered the full Estate Duty. The result of this sort of thing will be that no further money will come from that country.
I should be glad to have details of any cases where my hon. Friend thinks our present action may not be in accordance with the long-term benefit of this country.