My Lords, Amendments 54A and 54E would add this new condition-condition D-to the definition of a Scottish taxpayer. If I understand rightly, my noble friend's intention here is that a serving full-time member of the Armed Forces should be a Scottish taxpayer only if their main place of residence for any part of the year is in Scotland and that residence is a property that they own rather than one provided by their employer.
The Government have given careful consideration to the treatment of serving members of the Armed Forces in relation to the Scottish rate of income tax. We have consulted with the Scottish Government and following that consultation the Government have decided that members of the Armed Forces who meet the close-connection test should be liable to pay income tax at the Scottish rate. Prior to the introduction of the Scottish rate, HMRC will work with the Ministry of Defence to ensure that guidance is available to service men and women on their particular circumstances.
My noble friend raises a perfectly reasonable question about whether there is or should be an alternative test. At present, however, members of the Armed Forces will be Scottish taxpayers if they meet the close-connection test. It is difficult to see any justification for distinguishing between those who rent and those who own property, or the extent to which members of the Armed Forces do or do not rent property from the Ministry of Defence rather than having their own. Therefore, we believe it is appropriate to keep the basic test also for members of the Armed Forces. On that basis, I hope that my noble friend will withdraw the amendment.