PERSONS DOMICILED IN CHANNEL ISLANDS OR ISLE OF MAN (Hansard, 25 July 1977)

§ Mr. Speaker
With permission, I shall put formally Amendments Nos. 67, 68 and 69.

§ Mr. Peter Rees
On a point of order, Mr. Speaker. Amendment No. 68 stands in my name and I have not so far indicated that I wish to move it formally, although I hope that I can do so.

§ Mr. Speaker
The hon. and learned Gentleman may speak to it but not yet move it, because we must first deal with Amendment No. 67.

§ Mr. Kenneth Lomas (Huddersfield, West)
On a point of order, Mr. Speaker. If I may say so, the hon. and learned Member for Dover and Deal (Mr. Rees) has played silly devils with the House tonight. If he is not prepared to put—

§ Mr. Speaker
Order. Lots of things happen in this place. I remind the House that we are taking at the same time Amendment No. 68, in Clause 43, page 36, line 32, leave out from beginning to 'paragraph' in line 34 and Government Amendment No. 69.

§ Mr. Peter Rees
I am grateful for your protection, Mr. Speaker.
Perhaps I can refer briefly to Amendment No. 68 relating to Clause 43 which is designed to amend the provisions of the 1975 Act concerning domicile. The amendment relates to subsection (3), 215 which deprives of relief the emoluments of a person domiciled in the Channel Islands, but who had a domicile somewhere else intermediately, if the emoluments derive from an office or employment under or with a person with whom he is connected". I suppose I can understand the reasons that have led the Government to put that provision into subsection (3), but I find it a little unattractive. A person is precluded from obtaining relief if he has spent a blameless life in the Channel Islands in the office of an uncle, father-in-law, or brother, but if he happened to be employed by a public company he would obtain relief in respect of his emoluments.
I think that the Government are a little prone to find avoidance where none will exist in practice. The Minister of State has taken a liberal approach to these matters. He has endeavoured to meet legitimate points put to him, and I hope he will realise that if subsection (3) is left unamended considerable hardship and injustice could be done to those who are in no real substantial sense distinct from those who hold employment with a public company. I hope that on that basis the amendment will find favour with the House and with the Minister of State.

§ Mr. Denzil Davies
Amendment No. 68 follows from the clause and Government Amendment No. 67. Government Amendments Nos. 67 and 69 go some way to meet a point raised in Committee by the hon. Member for Eastbourne (Mr. Gow), who sought to relax the connected persons rule in relation to property derived from emoluments earned in the Channel Islands.
The hon. and learned Member for Dover and Deal (Mr. Rees) is seeking to extend the exemption in respect of employment with a non-qualifying business. I cannot accept the amendment, because it seeks the removal of the connected persons rule where the employment is in a non-qualifying "investment" business. As the profits of such a business would not qualify for the relief provided by Clause 43, it would be a simple matter to avoid this restriction if the profits could be converted into assets qualifying for relief by being paid out in the form of emoluments to the owner's relatives, 216 or to the owner himself. There would be substantial scope for abuse.
Although I cannot accept Amendment No. 68 I am prepared, without commitment, to look at the point made by the hon. and learned Gentleman to see whether, as a result of not giving this relief, there will be some hardship. We shall look at this during the year, but I am not giving a commitment to accept the point. I hope that the House will accept Government Amendment No. 67.