§ LORD GRIDLEYasked Her Majesty's Government:
With reference to the Overseas Pensions Bill, what will be the taxation effects for pensioners of Her Majesty's Government's assumption of responsibility for payment direct to pensioners.
§ THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE)The taxation consequences, under present law, of the assumption by Her Majesty's Government of the responsibility for paying overseas pensions to individual pensioners direct were explained by the then Minister of Overseas Development on April 30, 1970 (House of Commons OFFICIAL REPORT,744WA Vol. 800, cols. 390-1). In order to prevent pensioners being placed in a worse position than they are at present, my right honourable friend the Chancellor of the Exchequer has agreed to introduce legislation which will provide the following income tax exemptions:
1. For United Kingdom resident pensioners who retire before April 6, 1973, exemption from tax on pensions for service in Malawi, Zambia and Trinidad. (The Inland Revenue will continue the present concessional extension of the exemption to pensions for service elsewhere for those whose final service was in Malawi or Zambia.)
2. For other United Kingdom resident pensioners who retire before April 6, 1973, exemption from tax on such part of their pensions as is paid abroad and not remitted to this country.
3. Exemption of pensions paid to persons not resident in the United Kingdom.
None of these exemptions will apply to supplements payable under United Kingdom Pensions Increase legislation.
House adjourned at nineteen minutes past nine o'clock.