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W(B)L 51-7406
batte mottheo
UKC
งา
their Hong Kary tax liability.
(
Income Tax Liability: the much
higher incidence of UK income tax would appear to raise a problem so far as your officers would be
concerned.
J
In the usual form of secondment the officer is paid by the receiving Government and pays tax only to that Government. This was the basis on
which the Political Advisers originally served; they paid Hong
Kong tax only. Their terms of service have since been changed, as
you have indicated. From HMG funds
they are now paid their Diplomatic Service salaries (and allowances appropriate to Hong Kong) and the
Hong Kong Government reimburses HMG (paying additionally a contribution in respect of the pension liability). Thus the Political Advisers are now
liable to double taxation in the
UK since HMG pays them and in Hong Kong because the income is received
by reason of employment there. The Inland Revenue has agreed ₺ grant unilateral relief for the Hong Kong tax charged; in effect
they
-
thfrefore
A double tax liability would
fall on the Hong Kong officer
serving in the FCO who was remunerated
on the same basis; his UK tax
liability would, however, be greatly in excess of his normal Hong Kong liability and unless you could find
some way of picking the former up for him his service here would be a
rather unattractive and unrewarding financial proposition. I believe you did have some such arrangement
to cater for the UK tax liability
of your staff posted to the Hong Kong
Government Office here before their
exemption from UK tax was agreed with
the Inland Revenue.
/These