Revenue Note for Guidance

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Revenue Note for Guidance

1019 Assessment of wife in respect of income of both spouses

Summary

This section enables a married couple to elect, or to be deemed to have elected, for the wife to be the assessable spouse in joint assessment cases. Provision is made in the section for the circumstances where this is to occur, the manner in which it is to occur, the withdrawal of an election under this section and the adaption of certain references in the Income Tax Acts.

Details

Definitions

(1) “basis year” is the year of marriage or, if earlier, the latest year before that year for which details of the incomes of both the spouses are available at the time they first elect or are deemed to elect for joint assessment under section 1017.

“year of marriage” is the year in which the marriage took place.

Circumstances where a wife is the assessable spouse

(2) A wife is assessable to income tax on both her own and her husband’s income where —

  • the couple jointly elect, before the 1st of April in any tax year, that the wife is to be the assessable spouse, or
  • the couple —
    • married in 1993–94 or later,
    • are deemed to be jointly assessed under section 1017, and
    • in the basis year the wife was the higher income earner.

Assessment of wife

(3) Where a wife is the assessable spouse, references in the Income Tax Acts —

  • to a husband being assessed in respect of his own and his wife’s income are to be read as a wife being assessed in respect of her own and her husband’s income, and
  • to the income of a wife being deemed to be her husband’s income are to be read as income of a husband being deemed to be his wife’s income.

(4)(a) Where a wife is assessed to income tax on both incomes because she was earning the highest income in the basis year then —

  • she is to continue to be so assessed for subsequent years unless —
    • the couple elect for joint assessment which would have the effect of treating the husband as the assessable person,
    • either of them opts for single treatment under section 1016, or
    • either of them opts for separate assessment under section 1023,

and

  • such a charge is valid on the wife even if her income does not exceed her husband’s in later tax years (in other words she remains the assessable person).

(4)(b) Where a wife was the assessable spouse before an election for separate treatment (section 1018) or separate assessment (section 1023), she continues to be the assessable person on the move back to joint assessment.

(5) Where a married couple elect that the wife should be the assessable spouse for a year of assessment, then that election has effect for subsequent years unless it is withdrawn by the couple before the 1st of April in a subsequent year. Where the election is withdrawn by the couple, the husband becomes the assessable spouse (unless, of course, the couple opt for single treatment or separate assessment).

Relevant Date: Finance Act 2021