§ Mr. JOYNSON-HICKS
asked the Chancellor of the Exchequer whether he is aware that from time to time there is in America considerable doubt as to the exact freedom from British taxes of the various bonds and short-dated notes issued 487W on behalf of Great Britain in that country; and whether he can make a statement as to the absolute exemption of these securities from all Income Tax, Super-tax, Death Duties, and British taxation of every description?
§ Mr. BONAR LAW
I am not aware that any doubt is entertained in America as to the scope of the exemptions from British taxation which are enjoyed by British Government securities issued in the United States of America since the outbreak of War. The effect of these exemptions is as follows:—
- (1) No deduction in respect of any British tax, present or future, is made or to be made from payments in respect either of the interest or of the principal of any of these securities.
- (2) Further, the securities are exempt from liability for assessment to British taxation under the following provisions:—
- (a) The Anglo-French American loan was issued subject to the condition prescribed by Section 1 (3) of the American Loan Act, 1915, namely:Any securities issued for the purposes of any such loin in the United States of America except where they are held by persons domiciled in the United Kingdom, or by British subjects ordinarily resident in the United Kingdom, shall not be liable no any 'axation present or future.(b) Securities issued subsequently in America fall under Section 47 of the Finance (No. 2) Act, 1915, as amended by Section 44 (1) of the Finance Act, 1916, the effect of which is that neither the capital nor the interest of these securities will be liable to any British taxation, present or future, so long as the securities are in the beneficial ownership of persons who are neither domiciled nor ordinarily resident in the United Kingdom; further, the interest will not be liable to British Income Tax, including Super-tax, so long as the securities are in the beneficial ownership of persons who are not ordinarily resident in the United Kingdom, irrespective of their domicile.
There has never been any suggestion that a person living here who does not satisfy the conditions set out in paragraph 2 (a) or (b) above, as the case may be, would not be liable, in respect of a holding of these securities, to the same public burdens as attach to the holding of any other securities by persons living in this country.