Letter: Non-dom tax isn’t the only colonial hand-me-down

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Although John C Mowinckel (Letters, April 12) questions the exact origins of the UK’s non-dom tax status, it is now widely known that its origins lie in the country’s colonial past. Less well known is that another quirk of our fiscal regime has a similar history — the tax-free pension lump sum.

Expatriate members of the Imperial Civil Service which ran India until independence in 1947 were paid, at the end of their contracts, in addition to their annual pension, a lump sum with the intention that they could buy a house on their return.

The tax-free status of this payment and other similar lump sums paid as part of pension arrangements was confirmed in the Superannuation Act of 1909. I imagine any civil servants involved in the drafting of this bill were happy to see this outcome as they themselves stood to benefit.

William Claxton-Smith
London N5, UK

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