Netherlands Benefit Act for victims of persecution 1940 to 1945
Published 9 December 2015
© Crown copyright 2015
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Who is likely to be affected
Recipients of payments made by the Netherlands government through the ‘Wet uitkeringen vervolgingsslachtoffers 1940 to 1945’ scheme (‘the scheme’) for victims of national-socialist and Japanese aggression during World War II.
General description of the measure
This measure exempts from Income Tax payments received by individuals from the Netherlands government under the scheme.
Policy objective
This measure aligns the tax treatment of payments to individuals made by the Netherlands government through the scheme, bringing them into line with pensions and/or annuities payable under special provision for victims of National Socialist persecution made by the Federal Republic of Germany or Austria.
Background to the measure
The Netherlands’ scheme makes payments to eligible individuals that were victims of persecution in Europe or Asia during the Second World War. In order to benefit from the scheme, recipients must either have had Dutch nationality, have been a Dutch subject or persecuted on Dutch territory and later acquired Dutch nationality. Payments from the Netherlands government through the scheme are currently included in the calculation of an individual’s Income Tax liability.
In April 2014, an Upper Tribunal (Administrative Appeals Chamber) ruled on a housing benefit claim, where a victim of National Socialist persecution who received payments from a Netherlands scheme contended that the failure to treat the payments in the same way as pensions and annuities from Germany or Austria amounted to unlawful discrimination.
This measure will therefore bring payments to victims of national-socialist and Japanese aggression, made through the scheme, into line with those made by the Federal Republic of Germany or Austria by removing the Income Tax liability of those payments.
Detailed proposal
Operative date
The Income Tax exemption will have effect on and after 6 April 2016.
Current law
Under current law, payments under the scheme are taxable as income, but a pension or annuity payable under any special provision for victims of National Socialist persecution paid under the law of the Federal Republic of Germany or Austria is entirely exempt from Income Tax. This exemption is included in Chapter 17 of Part 9 of Income Tax (Earnings and Pensions) Act 2003 (ITEPA).
Payments from the Netherlands government are not within the exemption and are included in the calculation of an individual’s Income Tax liability.
Proposed revisions
Legislation will be introduced in Finance Bill 2016 to extend the exemption in Chapter 17 of Part 9 of ITEPA to include payments made by the Netherlands government to victims of national-socialist and Japanese aggression.
As a result, payments from the Netherlands government through the scheme will not be included in the calculation of an individual’s Income Tax liability.
Summary of impacts
Exchequer impact (£m)
| 2015 to 2016 | 2016 to 2017 | 2017 to 2018 | 2018 to 2019 | 2019 to 2020 | 2020 to 2021 |
|---|---|---|---|---|---|
| - | negligible | negligible | negligible | negligible | negligible |
This measure is expected to have a negligible impact on the Exchequer.
Economic impact
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
Eligible individuals will not be liable to pay Income Tax on payments received through the scheme. This measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
HM Revenue and Customs (HMRC) does not hold data on individuals in receipt of payment through the scheme. Recipients will include victims of National Socialist persecution. This will have a positive equalities impact as the exemption will cover persons who were persecuted by the National Socialist regime on the basis of race, religion, physical or mental disability or sexual orientation. There should be no negative impact on people with protected characteristics.
Impact on business including civil society organisations
There is no impact on administrative and compliance cost for businesses, employers, pension providers or civil society organisations.
Operational impact (£m) (HMRC or other)
There will be no significant operational impacts on HMRC.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be kept under review through communication with affected taxpayer groups.
Further advice
If you have any questions about this change, please contact Claire Ritchie on Telephone: 03000 586813 or email:claire.ritchie@hmrc.gsi.gov.uk.