Section 303: Visiting forces and staff of designated allied headquarters
1252.This section confers income tax benefits upon visiting forces and NATO staff.
1253.The section derives from section 323 of ICTA, which confers two income tax benefits:
earnings paid by the government of a designated country or by a designated allied headquarters are exempt from income tax; and
an individual to whom the section applies is not treated as resident in the United Kingdom by reason solely of being a member of a visiting force or of being attached to, or an employee of, a designated allied headquarters.
1254.This section deals with the first income tax benefit. It is proposed to deal with the second benefit in a future rewrite Bill.
1255.The exemption from income tax applies for several different descriptions of individuals:
members of a visiting force of a designated country;
members of a civilian component of a visiting force of a designated country;
members of the armed forces of a designated country attached to a designated allied headquarters;
members of a civilian component of the armed forces of a designated country attached to a designated allied headquarters; and
employees of a designated allied headquarters who come within a description agreed between the government and the other members of the NATO Council.
1256.Section 323 of ICTA is entitled “Visiting forces”. This section has a longer title, which is designed to be more informative.
1257.Two definitions needed for this section are contained in Part 1 of the Visiting Forces Act 1952. The definitions are those of a visiting force, in section 12(1) of that Act, and of a member of a civilian component of a visiting force, in section 10 of that Act. No attempt has been made to set out those definitions in this section – partly for reasons of length and partly because there is no wish to lose the explicit link between this section and the 1952 Act.
1258.Following the enactment of the British Overseas Territories Act 2002, references to “British Dependent Territories citizen” in earlier enactments are to be read as “British overseas territories citizen”. This change has been incorporated in subsection (4) .
1259.In this section, the cross-references to the Visiting Forces Act 1952 differ slightly from those in section 323 of ICTA. Subsection (5) contains a reference to “Part 1 of the Visiting Forces Act 1952” as opposed to the reference to “the Visiting Forces Act 1952” in section 323(4). The additional words “Part 1 of” were in section 367(3) of ICTA 1970 (the predecessor of section 323(4) of ICTA 1988). These words have been reinstated, because the two most important interpretative provisions, for present purposes, are in Part 1 of the 1952 Act and apply for the purposes of that Part. Those provisions are the definitions of a member of a civilian component of a visiting force and of a visiting force.
1260.Subsection (5) also corrects another minor drafting error in section 323(4). That subsection refers to subsections (1) and (2) of section 323, and it is then stated that “those subsections shall be construed as one with the Visiting Forces Act 1952”. However, the reference to a “civilian component” of a visiting force depends entirely upon subsection (4) itself; and no requirement is imposed to construe subsection (4) as one with the 1952 Act. It is thought that there cannot be any doubt that the provisions of section 10 of the Visiting Forces Act 1952 must be applicable; and the provision has been rewritten on this basis.
1261.Section 323 is one of a number of provisions that confer tax benefits to visiting forces and NATO staff. Other provisions are:
section 11(1) of TCGA 1992 (for capital gains tax);
section 155 of the Inheritance Tax Act 1984 (for inheritance tax); and
section 74 of the Finance Act 1960 (for stamp duty).
