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Tax Exemptions (Overseas Governments)

Volume 227: debated on Monday 28 June 1993

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To ask the Chancellor of the Exchequer if he will provide an estimate of the gain to the Exchequer in each of the years 1991–92 and 1992–93 of tax exemption granted by overseas Governments to the income, profits and gains of the United Kingdom Government and United Kingdom Government bodies arising within the jurisdiction of those overseas Governments.

[holding answer 25 June 1993]: The United Kingdom Government are exempted from tax in all of the jurisdictions in which it invests. The amount of this exemption is of the order of some £300 million per annum.

To ask the Chancellor of the Exchequer if he will provide an estimate of the cost to the Exchequer in each of the years 1991–92 and 1992–93 of granting tax exemption to the income, profits and gains of Governments, foreign states and integral bodies of foreign Governments arising in the United Kingdom.

[holding answer 25 June 1993]: Figures are not available of the total amount of tax which is not brought into charge because of sovereign immunity from taxation. However, income tax on investment income repaid on sovereign immunity grounds amounted to approximately £164 million in 1991–92 and £116 million in 1992–93. In addition relief was allowed at source of up to £5 million each year.