Mr. De la Bère
asked the Financial Secretary to the Treasury whether he is 47W aware that, in settling claims for refund of Income Tax made by superannuation schemes for the year 1939–40, the Inland Revenue authorities are insisting that tax on payments to members during the year shall be accounted for at the full statutory rate of 1s. 9d., regardless of the fact that for practically the first six months of the year before the standard rate of tax was increased to 7s., the trustees were only able to deduct from repayments made to members a sum equivalent to 1s. 4½d. in the £ a quarter of 5s. 6d., and that they now have no recourse against members who have left the service for the balance of 4½d.; whether he will make provision in the current year for tax being accounted for at the rate in force at the time of such repayments; and, further, whether such provision may be made retrospective for the year 1939–40?
§ Captain Crookshank
Under statutory regulations made by the Commissioners of Inland Revenue the trustees of a superannuation fund which is approved for the purpose of Income Tax relief under Section 32 of the Finance Act, 1921, are required to pay Income Tax on the amount of any contributions (including interest thereon) repaid to an employed contributor at one-fourth of the standard rate for the year in which the repayment is made. The regulations place this liability on the trustees and not on the individual contributors who receive the repayments. The position to which my hon. Friend refers arises solely out of domestic arrangements made by particular funds for passing on the burden of the liability to the individual contributors, and I do not think that the existence of such arrangements, with which the Revenue is not concerned, is a ground for altering the basis upon which tax is payable by the trustees.