sec. 10/2041/46.
No: 4
GOVERNMENT HOUSE,
HONG KONG
15th January 1948.
21
COPY
sir,
I have the honour to refer to your despatch No.397 dated the 16th December, 1947, and to earlier correspondence on the subject of double taxation relief.
2.
The question of relief in respect of Double Income Tax is a somewhat difficult one in view of local conditions and I propose to defer further consideration of the question of this Colony's accession to the Anglo-American Convention published as Command 6902, and of the question of making arrangements for the avoidance of double taxation as between the United Kingdom and this Colony on the lines of Enclosure 1 to Mr. Hall's Circular Despatch of the 23rd September 1946, until the Commissioner of Inland Revenue, who will shortly proceed on leave, has had an opportunity of discussing the full implications with you and with the United Kingdom Inland Revenue authorities.
3.
In so far as Estate Duty is concerned, I note from paragraph 20 of Annex "C" to Mr. Hall's Circular Despatch of the 23rd February 1946 that the existing arrangements with the United Kingdom are satisfactory to the united Kingdom, and I confirm that it is not desired to disturb the se arrangements. With reference to paragraph 19 of that despatch, it is not desired that this Colony should accede to the Anglo-American Convention published as Command 6625. The system of Estate Duty in force here, as you are aware, takes account only of property situate within the Colony and disregards not only property situate outside the Colony but also the domicile of the deceased. Accession to the Convention would not only involve the loss of revenue taken for granted in Mr. Hall's despatch, but would necessitate amendment and elaboration of the present simple and workable system without any tangible benefits in return. I consider it undesirable that the provisions in the Convention relating the situs of certain rights and interests to the domicile of the decedent should be applied here in view of the difficult- ies inherent in the interpretation of domicile in this Colony, where the vast majority of the population, both Chinese and non-Chinese, disclaims Hong Kong domicile.
THE RIGHT HONOURABLE
I have, etc.,
(Signed) A. GRANTHAM
GOVERNOR.
ARTHUR GRELCH JONES, M.P.
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