Diplomatic privilege

30 July 2013

Issue: 4413 / Categories: Forum & Feedback , Income Tax , Residence & domicile

A client works for the UK civil service and will be going abroad to serve as a diplomat in China. Diplomats are usually exempt from local taxes on a reciprocal basis, but does this extend to family members as well?

I have a client who will shortly be going to China to serve as a UK diplomat. As far as she is concerned I can see no problems with tax exemption as a diplomat applying in China to her remuneration or any other UK income particularly in light of what follows.

Her husband owns a UK company and will be in receipt of UK rental income. Nothing obvious appears in the 1984 double taxation treaty to afford him the diplomatic privilege afforded to his wife. HMRC Relief Instructions at RE2253 is unhelpful if not misleading. I did however pick up on article 27 of the treaty making reference to international law.

A search led me to the Diplomatic Privileges Act 1964 which appears to authorise the UK tax authorities to grant diplomatic privilege status to the family of a diplomat as long as the...

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