DETAILS OF U.K. FINANCE BILL

Press, Volume XCV, Issue 28266, 2 May 1957, Page 18

DETAILS OF U.K. FINANCE BILL

Tax Relief For Trading Firms

(N.Z. Press Association^.Copyright) LONDON, April 30. Britain’s Finance Bill, published today, outlined details of the scheme announced in the Budget for giving special tax treatment to British companies which trade abroad.

They will be called overseas trade corporations. Their trading income will be exempt from British incon e tax and profits tax, except when paid out as dividends to shareholders.

Companies will thus be able to reinvest profits abroad without paying British tax on them. They will also be able to shift profits ?rom one overseas country to another without —as at present —incurring tax on the money in transit through Britain. Tin and rubber companies in Malaya, for example, which at present pay heavy British tax. will not themselves have to pay any in future. From dividends to their shareholders they will- have to deduct and pay income tax at the British standard rate, less the rate of tax the company has paid abroad. Trading in U.S.

In the United States and several other countries the general tax rate is as high as the British rate. Even in these cases there may stiil be a benefit if the company can get any special tax relief in the overseas country, such as relief for depletion of minerals or as a pioneer industry. On his dividends from a corporation, an overseas shareholder will be in exactly the same position as if he invested in an overseas company.