BRITAIN'S INCOME TAX

Timaru Herald, Volume CI, Issue 15399, 16 July 1914, Page 2

BRITAIN'S INCOME TAX

EXEMPTION OF COLONIAL I INVESTMENTS. Press Association—By Tel.—Copyright. LONDON. July 13. During the debate on Clause -3 ot : tho Finance Bill, Mr VTorthington Evans's aiuondmciic to exempt i'njm taxation income derived from colonial inve-st-mests reinvested in t'he colonics was defeated by 26S votes to 197. MP, EVANS'S ARGUMENTS. LONDON, July if. Dur.ng the debate of the House of Commons on the Finance Bill, Mr Evans said Mr Lloyd George expected to realise a million from those escaping payment of income tax, owing to arrangements under which they left', income arising from investments abroad to be reinvested abroad. His' amendment- exempted money invested in the colonies, theproceeds of which were allowed to remain abroad for tho benefit of the colonies. The amendment did not effect colonial loans, because tho dividends of these were sent to Great Britain. The clause, a,s. drawn, did not tax tho rich man, who took tho trouble to escape. . Mr Evans detailed several methods of possible evasion, including tho formation of small limited liabilitv companies, which did not declare dividends. Mr Lloyd-George's clause, however, would seriously affect a. largo class of colonial financiers on their return to the Motherland. Many " planters, farmers, and ranchers returned to Britain who had made largo incomes on •a relatively small capital, but used a. great proportion of their income for the extension of their business in tho Dominions and colonies, yet they were taxed as if they wore entitled' to" spend the whole of their incomes in Grciifc Britain. The Dominions already levied incomo tax upon the incomes ''•' Mr Lloyd-George intended to plunder. Mr Evans contended that st was highly desirable that tho individual should bo encouraged to invest in estates within tho Empire. .Mr F. Cassel urged tho exemption of tho British Empire, quoting a precedent in tho Finance Act. of 1849. Other speakers emphasised the Siardsliip imposed on insurance companies. Sir A. "Williamson said Mr LlovdGeorgo ran tho risk of striking at a good many people who were conducting a. legitimate business, and who left, money abroad for the purpose of carrying on that business. Mr P. A. Molteno declared that the essential nature of tho proposal was to tax property in the jurisdiction of another Government. That was a delicate proceeding, and, he was alra'.d. would capo : considerable Ml-will in the colonies. [ Mr E. G. Prctyman said, the clause was very complicated, and might involve Great Britain in serious complications with tho colonies. ■ A foreigner escaped the double tax. but the col'onial only escaped while still a .resident of the colonies. Sir John Simon held that if it could bo done with rea.~ona.blo' effectiveness,there, was no sort of incomo which more obviously ought to bo taxed than incomo derived from investments abroad which were kept abroad because owners d'd not need-..togspend the money in Groat Britain.

Sir John Simon added that the Government proposed to make it dour, that, as it was now going to tax foreign income from, year to though- not j remitted, the taxpayer would; not' 'a Ist) ! lie iahlo to he ;vaxed again when the. accumulations were remitted. The: clause was an experiment, but the Go- ' vernmont denied that it had been devised in order to favour foreigners, nor would insurance companies suffer. After the .division on Mr Evans's amendment, Mr Lloyd-George moved an amendment, ' providing that companies and pereons who had been accumulating incomes abroad in past- years should start with a. dean .sheet. _ Several members of Uotli narties said the clause was absurd, badly drawn, and doubt fid, but the debate was automatically closured, and the amendment carr:ed by 270 votes to 197.

-.Clauses 6, 7, and S wero closured without being discussed.

The overseas High Commissioners arc satisfied with Mr Lloyd George's assurances that ho will amend clause five of t'he Finance Bill so as to oxemnt colonials not permanently resident in the United Kingdom, thiis leaving the income tax Jaw "as it is a-, present. ; S-'lr ,T. A. Simon, the A,ttorn,evGeneral. said that the Chancellor was prepared with amendments which would vary the effect of the clause, and make it clear that only those domiciled in Great Britain are included in the clause.