§ Mr. Letwin
To ask the Chancellor of the Exchequer if he will enter into negotiations with the Government of Guernsey to alter the United Kingdom's tax treaty with Guernsey so that the treatment of dividends from Guernsey companies is put on an equal footing with tax dividends from other EU countries. 
§ Dawn Primarolo
[holding answer 30 July 1998]: I am not clear what the hon. Member has in mind. The tax treatment of a dividend paid by a Guernsey company and received in the UK is no different from the tax treatment of a dividend payable by a company resident in an EU country. In both cases, where the recipient of the dividend is a UK resident company which controls at least 10 per cent. of the voting power in the company paying the dividend, tax credit relief is allowed for the amount of tax actually paid on the profits out of which the dividend is paid; a UK resident individual is not entitled to such relief.