"
2
(iii)
These topping up payments should be non-taxable.
Since I am prepared to regard these payments as part of salary and to have them treated in similar fashion to O.S.A.S. inducement payments, I can also agree that they would not be liable to U.K. income tax unless the recipient became resident long enough in the U.K. to be regarded for income tax purposes as a U.K. resident.
3. I fully understand your desire to settle the salary for the Governor of Mauritius before independence on 12th March and in the present state of financial difficulty in the territory would not press you to ask the Government of the territory to agree to an increase. In view of the non-implementation of our earlier agreement to an increase of £700 per annum I can now approve your request for an increase of £1,100 making a new salary total of £6,000 per annum.
4. I must sound a final note of caution. I have agreed certain concessions by analogy with the treatment given to 0.S.A.S. inducement payments but I must ask you to agree that whatever treatment may be given to Governors' salaries shall not be pleaded in aid of a case for similar treatment for 0.S.A.S. officers.
5. Copies of this letter go to the recipients of yours.
Yu
(S.H. Wright)