HC Deb 11 June 1942 vol 380 cc1262-3W
Sir L. Lyle

asked the Postmaster-General what is the present annual amount disbursed in payments to holders of Post Office annuities; and whether, in the publicity used to sell these annuities to the public, it has always been made abundantly clear to purchasers that the savings which they so invested would be subject to Income Tax in respect of that part representing a refund of principal as well as of the part representing interest?

Mr. Grimston

The amount paid to holders of Post Office annuities in 1941 was £702,500 net (i.e. after deduction of Income Tax where appropriate) in respect of £904,000 gross. Publicity matter issued states that Income Tax is not deducted if the annuitant is entitled to exemption, and that it is deducted at the reduced rate where it is clear that the standard rate of tax does not apply. An intending annuitant is not explicitly informed in the sense suggested in the latter part of the Question; but the literature sent to him leaves no room for doubt that the whole of the annuity is subject to tax at the rate, if any, applicable to him. Approximately 60 per cent. of Post Office annuities are paid without deduction of tax.