§ Mr. Ogdenasked the Chancellor of the Exchequer whether he has any proposals for changing the provisions of the proposed new tax treaty with the United States of America so far as it would affect the United Kingdom tax position of women with United States citizenship who before 1974 married husbands domiciled within the United Kingdom; and if he will make a statement.
§ Mr. Denzil DaviesYes. Discussions have been held with the American authorities and agreement has been reached at official level about the text of a further protocol to the treaty and protocol which were considered by this House on 12th January. [Official Report, Vol. 923, c. 1573–1604.] So far as American wives are concerned, the effect of the further protocol will be that those who, before 1974, married husbands domiciled within the United Kingdom will be treated from 6th April 1976, in determining their domicile for United Kingdom income tax and capital gains tax purposes, as if the marriage had taken place in 1974. This means that for these purposes they, like those women who married in 1974 or later, will not 607W be regarded as having acquired their husband's domicile; their domicile will be determined by reference to the same factors as in the case of any other individual capable of having an independent domicile.
The protocol also clarifies the effect of the treaty provisions on the tax treatment of income paid out of trusts.
Since the text of the protocol is rather long for incorporation in a Written Answer I have arranged for copies to be made available in the Library and from the Inland Revenue at Somerset House. After signature the protocol will be laid before the House for consideration as a schedule to a draft Order in Council.