asked the Chancellor of the Exchequer whether he can state the basis of assessment of a soldier who is subject to Indian Income Tax and whose wife is subject to British Income Tax; and, particularly, in what proportion the £165 at the lower rate of British Income Tax is divided between husband and wife.
I assume that my hon. and gallant Friend has in mind a case in which the soldier is not resident in the United Kingdom and his wife is resident here. In such a case the soldier is not liable to United Kingdom Income Tax on any income arising to him from sources outside this country, and is entitled to a proportion of the personal reliefs and allowances (including the reduced rate relief on the first £165 of income) which he would have received if he had been resident, the proportion being that which his income liable to United Kingdom Income Tax bears to his total income from all sources. If he and his wife are treated for taxation purposes as living together he is entitled, as a non-resident, to the appropriate proportion of the allowances due to a married couple calculated by reference to the joint liable incomes of himself and his wife as compared with the joint total income, Alternatively, if it is to their advantage, he and his wife may be treated as single and separate individuals for United Kingdom Income Tax purposes. In that event the wife receives the full reliefs applicable to a single person against her income and the husband receives the appropriate proportion of a single person's reliefs against the income on which he is liable to United Kingdom tax.
asked the Secretary of State for India what allowances are permitted in the Indian income assessments on British soldiers liable to Indian Income Tax, both single and married, during their service in S.E.A.C. or India Command.
I would refer my hon. and gallant Friend to my replies of 13th May, 1943, and 22nd February, 1945, of which I am sending him copies.