§ Mr. Marlowasked the Chancellor of the Exchequer what is the rate of tax raised by the European Community on transitional allowances paid to retiring officials; and what proposals he has for harmonising the tax treatment of British nationals recently in the employ of the European Community with other British nationals.
§ Mr. Peter ReesThe Community income tax is administered by the European Commission and is, I understand, charged at graduated rates starting at 8 per cent. on taxable income exceeding Belgian francs 803 per month and rising to a maximum of 45 per cent. on taxable income exceeding Belgian francs 50,735 per month. The rate bands are, however, adjusted by a cost of living weighting.
Although Community transitional allowances and pensions are taxed by the Community itself, United Kingdom tax law applies in the ordinary way to the other income of former commissioners and Community servants who are resident in the United Kingdom. The Community's income tax system was formulated before the United Kingdom became a member and I have at present no plans to seek any alteration to it.