Tax rebate scheme for soldiers

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All troops who pay council tax for a property in the UK will receive the £140 tax-free rebate for their six month tour. The payment will be extended to all personnel serving overseas from next year.

Mr Browne said: "I am delighted to announce a further enhancement to the operational welfare package.

"Armed Forces personnel who pay council tax and who deploy to Iraq and Afghanistan will be entitled to a tax free payment of £140.

"This payment is designed to offset around 25% of their council tax payments whilst they are on operations.

"It underlines the Government's commitment to support our Armed Forces and their families.

"We intend to extend this payment to all those deployed overseas on operations next year."

The new measures will be introduced from October and first payments will be made from April 1 2008.

The rebate will only be available to troops who pay council tax for a property in the UK. Those living in Single Living Accommodation do not pay any accommodation charges, including council tax while deployed on operations.

The rebate will be added to the tax-free Operational Allowance which is paid to servicemen and women at the end of an operational tour in Afghanistan or Iraq. The tax-free Operational Allowance is currently worth £2,320 over a six month tour of duty in Iraq or Afghanistan.