Skip to main content

Sovereign Wealth Funds

Volume 475: debated on Monday 28 April 2008

To ask the Chancellor of the Exchequer what recent representations he has received on sovereign wealth funds; and if he will make a statement. (201975)

The Government have received contributions from a wide range of parties with an interest in the current international debate about sovereign wealth funds, including the Business Council for Britain.

The Government welcome these contributions to the international debate that is currently taking place at the International Monetary Fund and the Office for Econmic Co-operation and Development to develop best practice for sovereign wealth funds and host countries.

To ask the Chancellor of the Exchequer (1) whether sovereign wealth funds are exempt from taxation in the United Kingdom; and if he will make a statement; (201976)

(2) how much was raised by sovereign wealth funds in the UK in each of the last five years.

Where a sovereign wealth fund is an integral part of the government of a foreign sovereign state it will benefit from immunity from UK tax. As a result of this immunity, no taxation will have been received from sovereign wealth funds.

The United Kingdom recognises the principle of international law known as sovereign immunity whereby one sovereign state does not seek to apply its domestic laws to another sovereign state. In accordance with this principle, current UK practice is to regard as immune from direct taxes all income and gains which are beneficially owned by the head of state and the Government of a foreign sovereign state recognised by the UK.