§ Mr. Arthur Lewis
asked the Chancellor of the Exchequer if he will take steps to ensure that persons who are normally resident in tax havens and who receive payments from public funds in the United Kingdom have tax deducted from such payments before they leave the United Kingdom.
§ Mr. Ridley
I take it that the hon. Member is referring to interest.
The general rule is that payments of interest on United Kingdom Government or local government securities to non-residents, whether they are resident in a tax haven or elsewhere, are made after deduction of tax at source.
Interest paid on certain Government securities to persons who are not ordinarily resident in the United Kingdom is exempted from tax by statute. In such cases the interest may be paid in full provided the recipient first establishes his entitlement to the exemption. Checks are subsequently made at regular intervals to ensure that the conditions for exemption remain satisfied.