Revenue Note for Guidance

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Revenue Note for Guidance

1024 Method of apportioning reliefs and charging tax in cases of separate assessments


This section sets out the method of apportioning personal reliefs between the husband and wife, and to charging tax on the income of each spouse in cases where separate assessment is claimed under section 1023. The section provides that any personal allowances and reliefs which are unused, by reason of the fact that they exceed the amount of income of either of the spouses, are to be set against the income of the other spouse. Similarly, any benefit from the application of the lower rate of tax not used by one spouse is to be passed on to the other spouse.



(1) & (2)(a) Where a husband and wife opt to be separately assessed to tax, the benefits flowing from the personal reliefs may be given by way of repayment of tax already paid, by way of reduction of the amount to be paid or by both means as may be necessary, and the allocation between the husband and wife is to be as follows —

  1. In the proportion in which they incurred the expenditure giving rise to the following reliefs —
    • relief for interest paid on certain home loans (section 244),
    • owner-occupiers for expenditure on construction, refurbishment or conversion, as appropriate, of a qualifying premises (sections 372AR and 372AAB),
    • relief for health expenses (section 469),
    • relief for insurance against expenses of illness (section 470),
    • relief for premiums under qualifying long-term care policies (section 470A),
    • age-related tax credit for health insurance premiums (section 470B),
    • allowance for rent paid by certain tenants (section 473),
    • relief for contributions to permanent health benefit schemes (section 471),
    • relief for fees paid for third level education (section 473A),
    • relief for fees paid for training courses (section 476),
    • relief for service charges (section 477),
    • relief for payments made by certain persons in respect of alarm systems (section 478),
    • relief for new shares purchased on issue by employees (section 479).
    • allowances to owner-occupiers in certain areas other than the Custom House Docks Area (paragraph 12 of Schedule 32), and
    • relief for expenditure on certain buildings in certain areas (paragraph 20 of Schedule 32).
  2. In the proportion of half and half —
    • relief in relation to married persons tax credit (section 461),
    • age tax credit (section 464),
    • incapacitated child tax credit (except where the child is in the sole custody of the claimant – see (c) below) (section 465), and
    • relief for blind persons’ tax credit (section 468).
  3. According to who maintains the child or dependent relative —
    • relief in respect of an incapacitated child where the child is in the sole custody of the claimant (section 465(3)), and
    • dependent relative tax credit (section 466).
  4. Others —
    • in the proportion in which they bear the cost of employing a person to take care of an incapacitated individual (section 467),
    • the Employee (PAYE) tax credit is given to the spouse who has income subject to tax under PAYE (section 472),
    • the deduction for the long-term unemployed (section 472A) and the seafarers allowance (section 472B) are given to the qualifying individual in each case,
    • relief for Trade Union subscriptions is given to the husband or the wife according as he or she is entitled to the relief (section 472C),
    • in the proportion in which they made a film investment (section 481),
    • according as the spouse made the relevant donation to the approved body (section848A(7)), and
    • in the proportion in which they subscribed for the eligible shares giving rise to the relief (Part 16).

Allocation of exemptions and standard rate bands

(2)(b) Income tax exemptions under sections 187 and 188 are to be split between married persons in proportion to the amount of income tax that would have been payable by each if the exemptions had not applied.

(2)(c) Where a couple opt for separate assessment, each spouse is given half the standard rate band of a married couple (section 15), with the balance being charged at the higher rate.

Transfer of surplus between spouses

(3) Where one spouse’s tax is reduced to nil without using up all the allowances due to that spouse, as apportioned under this section, any balance of relief is to be granted to the other spouse.

(4) If one spouse has insufficient taxable income to utilise his/her full entitlement at a particular rate of tax, then the balance of that rate band of tax is transferable to the other spouse if this results in a reduction of the amount payable by the other spouse.

Relevant Date: Finance Act 2021