§ Mr. W. R. SMITHasked the Chancellor of the Exchequer whether the pensions of widows whose husbands were killed in the War are liable to Income Tax; and, if so, will he consider the advisability of exempting them from the same, as is the case with other War pensions?
Mr. CHAMBERLAINThe pensions to which the hon. Member refers are by law chargeable to Income Tax at the reduced rates of tax applicable to earned incomes, subject, of course, to the general allowances and reliefs in favour of small incomes. The statutory exemption to which the hon. Member refers is not general, but restricted to so much of the pension as is attributable to the disablement or disability of the pensioner. But the case of widows' pensions has been the subject of a recommendation by the Select Committee on Pensions in their Second Special Report and is, of course, included within the scope of the Reference to the Royal Commission on Income Tax, who may be expected to make recommendations on the general scheme of reliefs and abatements. I must await their Report before adding anything to my previous replies on the subject.