§ 6.5 p.m.
THE MARQUESS OF READINGMy Lords, I beg to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether any and, if so, what categories of payments made by the Government of the West German Federal Republic by way of compensation to refugees in this country from the Nazi régime are subjected to United Kingdom taxation.]
§ THE MINISTER WITHOUT PORT-FOLIO (THE EARL OF DUNDEE)My Lords, the payments made by the Government of the West German Federal Republic by way of compensation to Nazi victims fall into four main categories. These categories are: first, compensation to the dependants of persons who lost their lives. This takes the form of a lump sum, plus monthly maintenance payments. The lump sum is treated for United Kingdom tax purposes as capital, and therefore is not taxable. The monthly payments are liable to tax. Second, compensation for loss of, or damage to, a profession, trade, managerial position or employment. A person entitled to compensation under this head can elect to take either a lump sum payment or an annuity. The lump sum is not liable to tax; the annuity is liable. Third, compensation for loss of pensions rights. Compensation for loss of pension rights is payable to public servants and, where the German State has taken over the liabilities of former employers, to certain other employees. The compensation takes the form of recurrent monthly payments, and is liable to tax. Fourth, compensation for persons who have themselves suffered injury to body or health. This is not liable to tax.
The treatment for United Kingdom tax purposes of all categories follows the treatment which would be accorded under the income tax law to compensation payments of a similar nature received from other sources by persons resident in this country.
THE MARQUESS OF READINGMy Lords, I am obliged to my noble friend. I wonder whether he could tell me this: is the United Kingdom the only country 298 which imposes taxation on payments of this kind?
§ THE EARL OF DUNDEENo, my Lords; I should have to have notice of that. In Germany, taxation is not imposed: but I should require notice in regard to other countries.