BRITISH INCOME TAX

Dominion, Volume 7, Issue 2202, 15 July 1914, Page 7

BRITISH INCOME TAX

NO EXEMPTIONS >

INVESTMENTS ABROAD A BIG DEBATE . By Telesraph—Preaa Association—Copyright (Rec. July 14, 10.50 p.m.) London, July 14. In the Houso of Commons the Finance Bill was further considered. Mr. L. Worthington Evans (Unionist) moved an amondment to Clause 5, to exempt income from colonial investinents reinvested in the colonies. Ho said Mr. Lloyd George expected to realiso a million from those escaping payment of income tax owing to arrangements under which they left tho income arising from investments abroad to bo reinvested abroad. His (Mr. Evans') amendment exempted money invested ill the colonies of which the proceeds aro ullowed to remain abroad for the bene,-, fit of tho colonies. Tlio ,amendment did not affect colonial' loans, becauso the dividends were sent to Britain. Tim clause as drawn was not a tax ou tho rich man, who took 119 trouble to escape. ' • Mr. Evans detailed several methods of possible evasion, including the formation of sinall limited liability companies, which would not declare dividends. Mr. Lloyd George's clause! however, would seriously affect a'large class of colonial financiers 011 their return! to tlie Motherland. There were many planters, farmers, and ranchers retui'ning to Britain, Who made large incomes on relatively small capital, but used a great proportion of the incomes for extension if their business in the Dominions and colonies, yet they were taxed as if they were entitled to spend the whole of their incomes in Britain. The Dominions wore already levying income • tay upon the incomes which - Mr. Lloyd George intended-to plunder. Mr,, Evans contended that it was highly desirable that the individual should be encouraged to invest in estates within the Empire. Mr; F. M. Cassell (TTnionist) urged tho exemption of tho British Empire, emoting the precedent of tlio Finance Act of, 1!j49. . Other speakers emphasised . the hardships of insurance companies. - Sir. A. Williamson (Llneral) said Mr. Ijloyd George ran the risk of striking a ntood many people conducting legitimate business, who left money abroad for tho purpose of carrying on business. Mr. P. A. Molteno (Liberal) declared that the essential nature of proposal was to tax property in the jurisdiction of another Government, and that, was a'delicate, proceeding He ivas afraid it would cause considerable ill-will in tho, colonies.' , _ Mr. E. G. Protyman- (Unionist.) said the . clause was very complicated, and might involve Britain, in serious complications with tho rolonies ; foreigners sscaped the dbublo tax, ■ but colonials onlv escaped while still resident in the colonies. ... Sir John- Simon -(Attorney-General) held that if. it could be done with reasonable effectiveness, there was no sort of income which' more obviously ought to be taxed than the income from investments abroad, which were kept, abroad because the owners did not need to spend it iiv Britain. Sir John Simon addod that tho Government proposed to make it clear that as they wore now going to tax foreign Income froiii year to year, and though it be not remitted, tho taxpayer would not-also be liable to be taxed again when the accumulations wore, remitted. ;■■' Tho clause was an experiment, but the Government denied that tlie clause, was devised in order to -favour foreigners, nor would 'insurance companies suffer. Tlio'amendment was defeated by'26B votes to 197. After the division on Mr. Evans's amendment, Mr. Lloyd George moved another amendment providing that comnanies and persons who had been rolling up ineo'mo abroad for past years should start with a clean sheet.. Several ihembers of both parties said that \ho clause wai absurd, badly drawn', and doubtful h'lt- tlio debate, was automatically closured, and the amendment was carried by 270 votes to 190. . : Clauses six, seven, and eight were closured without discussion.