§ Lieut.-Colonel Bromley - Davenportasked the Chancellor of the Exchequer whether he is aware of the hardship suffered under the existing Income Tax 59W law by former German public servants living in this country who have become entitled to pensions under recent German legislation; and what steps he proposes to take to alleviate this hardship.
§ Mr. R. A. ButlerI understand that these former German public servants who were dismissed by the Nazis may claim pensions under a German law of 18th March, 1952, and that successful claimants receive pensions granted retrospectively to 1st April, 1951. These pensions are chargeable to United Kingdom Income Tax under Section 132 (2) (c) of the Income Tax Act, 1952, by reference to the amounts remitted to this country and hardship may occur if the amount remitted in one year is more than the pension attributable to one year.
I propose to seek Parliamentary approval for legislation in my next Finance Bill to adjust the tax liability in such cases. The adjustment will be broadly to regard only the pension attributable to one year as remitted in the year of the actual remittance, and to treat the excess as though it had been taxably for the previous years to which it is attributable. Pending Parliamentary approval of the necessary legislation, the Board of Inland Revenue will in outstanding cases require payment of tax only on the basis of the prospective reduced liability.