United States-United Kingdom Convention on Taxation and Fiscal Evasion Message to the Senate Transmitting the Convention.

To the Senate of the United States:

I transmit herewith, for Senate advice and consent to ratification, the Convention between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Estates of Deceased Persons and on Gifts, signed at London on October 19, 1978. For the information of the Senate, I also transmit the report of the Department of State with respect to the Convention.

The Convention would replace the estate tax convention with the United Kingdom which was signed at Washington on April 16, 1945, and has been in force since 1946. It would apply in the United States to the federal gift tax, the federal estate tax, and the federal tax on generation-skipping transfers. In the United Kingdom it would apply to the capital transfer tax. The Convention is similar in principle to the United States estate tax convention with the Netherlands, which was signed at Washington on July 15, 1969, and entered into force in 1971, and to the United States model estate and gift tax convention published by the Department of the Treasury in 1977.

The general principle underlying the Convention is to grant to the country of domicile the right to tax estates and transfers on a worldwide basis. The Convention also permits a credit for tax paid to the other country in which certain property was taxed on the basis of its location. The Convention would provide rules for resolving the issue of domicile.

The Convention would enter into force on the thirty-first day after instruments of ratification are exchanged and would have effect in the United States with respect to estates of individuals dying and transfers taking effect after that date.

I recommend that the Senate give early and favorable consideration to the Convention and give advice and consent to its ratification.

JIMMY CARTER

The White House,

May 3, 1979.