Jane
Kennedy: We have been clear from the outset that it is
unfair for a remittance basis user to continue to have the double
benefit of the remittance basis and UK personal allowances. We have
responded to concerns that remittance basis users with small amounts of
overseas income or gains would be adversely affected by the loss of the
personal allowances, by raising the limit above which a remittance
basis user would lose that personal allowance from £1,000 to
£2,000 of unremitted overseas income and gains. Above that
level, people who do not want to lose their personal allowances can
choose to be taxed on the arising basis like the majority of UK
taxpayers. We believe that that strikes the right balance. We do not
believe that it will be an extra burden on employers, because it will
all be done through self-assessment.
I note the
hon. Gentleman’s point that some employers may have concerns for
their employees, and I will give the matter some thought. However, I do
not believe that it will be a burden for employers. It is technically
possible for a small number of our double taxation treaties to prevent
the removal of the personal allowances when an individual claims the
remittance basis. In practice, however, the circumstances would be very
unusual. The individual would have to be treated as resident in both
the UK and another country during the year, the double taxation
agreement would have to treat them as treaty resident in the other
country, and they would have to have certain sorts of investments in
order to make it worth their while to claim the remittance basis. As a
result, we anticipate that the number of people to whom this applies
will be tiny. Those who do benefit will still be liable for the
£30,000
charge.
Mr.
Hoban: Are any of those potentially troublesome treaties
ones which the UK has with A8
states?
Jane
Kennedy: There are 16 double taxation agreements. If it
would be helpful to the Committee, I will establish which countries
those 16 apply to and return with that information after our
break.
Individuals
have a choice. If they want to claim the remittance basis, they will
lose their personal allowances and the annual exempt amount. No one
will be forced to claim the remittance basis. Individuals need to make
a decision on whether or not to claim, based on their own
circumstances.
It being
twenty-five minutes past Ten o’clock,
The Chairman adjourned the Committee
without Question put, pursuant to the Standing
Order. Adjourned
till this day at One
o’clock.
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