Finance Act, 1980

Chapter II

Taxation of Married Persons

Amendments of Part IX of Income Tax Act, 1967.

18.—As respects assessments to income tax for the year 1980-81 and any subsequent year of assessment, Part IX of the Income Tax Act, 1967 , is hereby amended by the substitution of the following chapter for Chapter I:

“Chapter I

Special Provisions as to Married Persons

Interpretation (Chapter I).

192.—(1) A wife shall be treated for income tax purposes as living with her husband unless either—

(a) they are separated under an order of a court of competent jurisdiction or by deed of separation, or

(b) they are in fact separated in such circumstances that the separation is likely to be permanent.

(2) (a) In this Chapter references to the income of a wife include references to any sum which, apart from this Chapter, would fall to be included in computing her total income, and the provisions of this Chapter shall have effect in relation to any such sum notwithstanding that some enactment (including, except so far as the contrary is expressly provided, an enactment passed after the passing of this Act) requires that that sum should not be treated as income of any person other than her.

(b) In the Income Tax Acts a reference to a person who has duly elected to be assessed to tax in accordance with the provisions of a particular section includes a reference to a person who is deemed to have elected to be assessed to tax in accordance with the provisions of that section and any reference to a husband who is assessed to tax in accordance with the provisions of section 194 for a year of assessment includes a reference to a case where he and his wife are assessed to tax, for that year, in accordance with the provisions of section 197.

(3) In this Chapter ‘the inspector’ means, in relation to a notice, any inspector who might reasonably be considered by the person giving notice to be likely to be concerned with the subject-matter thereof or who declares himself ready to accept the notice.

(4) Any notice required to be served under any section in this Chapter may be served by post.

Assessment as single persons.

193.—In any case in which a wife is treated as living with her husband, income tax shall be assessed, charged and recovered, save as otherwise provided by the Income Tax Acts, on the income of the husband and on the income of the wife as if they were not married:

Provided that, where an election under section 195 has effect in relation to a husband and wife for a year of assessment, this section shall not have effect in relation to that husband and wife for that year of assessment.

Assessment on husband in respect of income of both spouses.

194.—(1) Where, in the case of a husband and wife, an election under section 195 to be assessed to tax in accordance with the provisions of this section, has effect for a year of assessment—

(a) the husband shall be assessed and charged to tax, not only in respect of his total income (if any) for that year, but also in respect of his wife's total income (if any) for any part of that year of assessment during which she is living with him, and, for this purpose and for all the purposes of the Income Tax Acts, that last mentioned income shall be deemed to be income of his;

(b) the question whether there is any income of the wife chargeable to tax for any year of assessment and, if so, what is to be taken to be the amount thereof for tax purposes shall not be affected by the provisions of this section; and

(c) any tax falling to be assessed in respect of any income which, under this section, is deemed to be income of a woman's husband shall, instead of being assessed on her, or on her trustees, guardian or committee, or on her executors or administrators, be assessable on him or, in the appropriate cases, on his executors or administrators.

(2) Any relief from income tax which is authorised, by any provision of the Income Tax Acts, to be granted to a husband by reference to the income or profits or gains or losses of his wife or by reference to any payment made by her shall be granted to a husband for a year of assessment only if he is assessed to tax for that year in accordance with the provisions of this section.

Election for assessment under section 194.

195.—(1) A husband and his wife, where the wife is living with the husband, may, at any time during a year of assessment, by notice in writing given to the inspector, jointly elect to be assessed to tax for that year of assessment in accordance with the provisions of section 194, and where such election is made, the income of the husband and the income of the wife shall be assessed to tax for that year in accordance with those provisions.

(2) Where an election is made under subsection (1) in respect of a year of assessment, the election shall have effect for that year and for each subsequent year of assessment.

(3) Notwithstanding subsections (1) and (2), either the husband or the wife may, in relation to a year of assessment, by notice in writing given to the inspector before the end of the year, withdraw the election in respect of that year and, thereupon, the election shall not have effect for that year or for any subsequent year of assessment.

(4) (a) A husband and his wife, where the wife is living with the husband and where an election under subsection (1) has not been made by them for a year of assessment (or for any prior year of assessment) shall be deemed to have duly elected to be assessed to tax in accordance with the provisions of section 194 for that year unless, before the end of that year, either of them gives notice in writing to the inspector that he or she wishes to be assessed to tax for that year as a single person in accordance with the provisions of section 193.

(b) Where a husband or his wife has duly given notice under paragraph (a), that paragraph shall not have effect in relation to that husband and wife for the year of assessment for which the notice was given or for any subsequent year of assessment until the year of assessment in which the notice is withdrawn, by the person who gave it, by further notice in writing to the inspector.

Special provisions relating to tax on wife's income.

196.—(1) Where—

(a) an assessment to income tax (in this section referred to as ‘the original assessment’) has been made for any year of assessment on a man, or on a man's trustee, guardian or committee, or on a man's executors or administrators,

(b) the Revenue Commissioners are of opinion that, if an application for separate assessment under section 197 had been in force with respect to that year of assessment, an assessment in respect of, or of part of, the same income would have fallen to be made on, or on the trustee, guardian or committee of, or on the executors or administrators of, a woman who is the said man's wife or was his wife in that year of assessment, and

(c) the whole or part of the amount payable under the original assessment has remained unpaid at the expiration of twenty-eight days from the time when it became due,

the Revenue Commissioners may give to her, or, if she is dead, to her executors or administrators, or, if such an assessment as is referred to in paragraph (b) could, in the circumstances therein referred to, have been made on her trustee, guardian or committee, to her or to her trustee, guardian or committee, a notice—

(i) stating particulars of the original assessment and of the amount remaining unpaid thereunder, and

(ii) stating particulars, to the best of their judgment, of the assessment which would have fallen to be made as aforesaid,

and requiring the person to whom the notice is given to pay the amount which would have been payable under the last-mentioned assessment if it conformed with those particulars, or the amount remaining unpaid under the original assessment, whichever is the less.

(2) The same consequences as respects—

(a) the imposition of a liability to pay, and the recovery of, the tax with or without interest,

(b) priority for the tax in bankruptcy or in the administration of the estate of a deceased person,

(c) appeals to the Appeal Commissioners, the re-hearing of such appeals and the stating of cases for the opinion of the High Court, and

(d) the ultimate incidence of the liability imposed,

shall follow on the giving of a notice under subsection (1) to a woman, or to her trustee, guardian or committee, or to her executors or administrators, as would have followed on the making on her, or on her trustee, guardian or committee, or on her executors or administrators, as the case may be, of such an assessment as is referred to in subsection (1) (b), being an assessment which—

(i) was made on the day of the giving of the notice,

(ii) charged the same amount of tax as is required to be paid by the notice,

(iii) fell to be made and was made by the authority who made the original assessment, and

(iv) was made by that authority to the best of his or their judgment,

and the provisions of this Act relating to the matters specified in paragraphs (a) to (d) shall, with the necessary adaptations, have effect accordingly.

(3) Where a notice is given under subsection (1), tax up to the amount required to be paid by the notice shall cease to be recoverable under the original assessment and, where the tax charged by the original assessment carried interest under section 550, such adjustment shall be made of the amount payable under that section in relation to that assessment and such repayment shall be made of any amounts previously paid under that section in relation thereto, as are necessary to secure that the total sum, if any, paid or payable under that section in relation to that assessment is the same as it would have been if the amount which ceases to be recoverable had never been charged.

(4) Where the amount payable under a notice under subsection (1) is reduced as the result of an appeal or of a case stated for the opinion of the High Court—

(a) the Revenue Commissioners shall, if, having regard to that result, they are satisfied that the original assessment was excessive, cause such relief to be given by way of repayment or otherwise as appears to them to be just; but

(b) subject to any relief so given, a sum equal to the reduction in the amount payable under the notice shall again become recoverable under the original assessment.

(5) The Revenue Commissioners and the inspector or other proper officer shall have the like powers of obtaining information with a view to the giving of, and otherwise in connection with, a notice under subsection (1) as they would have had with a view to the making of, and otherwise in connection with, such an assessment as is referred to in subsection (1) (b) if the necessary conditions had been fulfilled for the making of such an assessment.

(6) Where a woman dies who, at any time before her death, was a wife living with her husband, he or, if he is dead, his executors or administrators may, not later than two months from the date of the grant of probate or letters of administration in respect of her estate or, with the consent of her executors or administrators, at any later date, give to her executors or administrators and to the inspector a notice in writing declaring that, to the extent permitted by this section, he or they disclaims or disclaim responsibility for unpaid income tax in respect of all income of hers for any year of assessment or part of a year of assessment, being a year of assessment or part of a year of assessment for which any income of hers was deemed to be his income and in respect of which he was assessed to tax under section 194.

(7) A notice given pursuant to subsection (6) to the inspector shall be deemed not to be a valid notice unless it specifies the names and addresses of the woman's executors or administrators.

(8) Where a notice under subsection (6) has been given to a woman's executors or administrators and to the inspector—

(a) it shall be the duty of the Revenue Commissioners and the Appeal Commissioners to exercise such powers as they may then or thereafter be entitled to exercise under subsections (1) to (5) in connection with any assessment made on or before the date when the giving of the said notice is completed, being an assessment in respect of any of the income to which the said notice relates, and

(b) the assessments (if any), to tax, which may be made after that date shall, in all respects and in particular as respects the persons assessable and the tax payable, be the assessments which would have fallen to be made if—

(i) an application for separate assessment under section 197 had been in force in respect of the year of assessment in question, and

(ii) all assessments previously made had been made accordingly.

Application for separate assessments.

197.—(1) Where an election by a husband and wife to be assessed to tax in accordance with the provisions of section 194 has effect in relation to a year of assessment, and, in relation to that year of assessment, an application is made for the purpose under this section, in such manner and form as may be prescribed by the Revenue Commissioners, either by the husband or by the wife, income tax for that year shall be assessed, charged and recovered on the income of the husband and on the income of the wife as if they were not married and all the provisions of this Act with respect to the assessment, charge and recovery of tax shall, save as otherwise provided by this Act, apply as if they were not married except that—

(a) the total deductions from total income allowed to the husband and wife by way of personal reliefs shall be the same as if the application had not had effect with respect to that year,

(b) the total tax payable by the husband and wife for that year shall be the same as the total tax which would have been payable by them if the application had not had effect with respect to that year, and

(c) the provisions set out in section 198 shall have effect.

(2) An application under this section in respect of a year of assessment may be made—

(a) in the case of persons marrying during the course of that year, before the 6th day of July in the following year, and

(b) in any other case, within 6 months before the 6th day of July in that year.

(3) Where an application is made under subsection (1), that subsection shall have effect not only for the year of assessment for which the application was made, but also for each subsequent year of assessment:

Provided that, in relation to a subsequent year of assessment, the person who made the application may, by notice in writing given to the inspector before the 6th day of July in that year, withdraw that election, and, thereupon, subsection (1) shall not have effect for the year of assessment in relation to which the notice was given or any subsequent year of assessment.

(4) A return of the total incomes of the husband and of the wife may be made for the purposes of this section either by the husband or by the wife but, if the Revenue Commissioners are not satisfied with any such return, they may require a return to be made by the wife or by the husband, as the case may be.

(5) The Revenue Commissioners may by notice require returns for the purposes of this section to be made at any time.

(6) In this section and in section 198 ‘personal reliefs’ means relief under any of the following:

(a) sections 138 to 145 and 151 and 152,

(b) section 12 of the Finance Act, 1967 ,

(c) section 3 of the Finance Act, 1969 ,

(d) section 11 of the Finance Act, 1971 ,

(e) section 8 of the Finance Act, 1974 , and

(f) section 7 of the Finance Act, 1979 .

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

198.—(1) Where, pursuant to an application under section 197, a husband and wife are assessed to tax for a year of assessment in accordance with the provisions of that section—

(a) subject to subsection (2), the benefit flowing from the personal reliefs may be given either by way of reduction of the amount of the tax to be paid, or by repayment of any excess of tax which has been paid, or by both of those means, as the case requires, and shall be allocated to the husband and the wife—

(i) so far as it flows from relief under sections 138 and 141 (other than subsection (2)), section 11 of the Finance Act, 1971 , and section 8 of the Finance Act, 1974 , in the proportions of one-half and one-half,

(ii) so far as it flows from relief under section 138B, to the husband or to the wife according as the emoluments from which the deduction under that section is made are emoluments of the husband or of the wife,

(iii) so far as it flows from relief in respect of a child under section 141 (2) or relief in respect of a dependent relative under section 142, to the husband or to the wife according as he or she maintains the child or relative,

(iv) so far as it flows from relief under sections 143, 145, 151 and 152, to the husband or to the wife according as he or she made the payment giving rise to the relief,

(v) so far as it flows from relief under section 12 of the Finance Act, 1967 , in the proportions in which they bore the expenditure giving rise to relief,

(vi) so far as it flows from relief under section 3 of the Finance Act, 1969 , in the proportions in which they bear the cost of employing the person in respect of whom the relief is given,

(vii) so far as it flows from relief under section 7 of the Finance Act, 1979 , in the proportions in which they incurred the expenditure giving rise to the relief,

(b) subject to subsection (3), section 8 of the Finance Act, 1980, shall apply for that year, in relation to each of the spouses concerned, as if the part of taxable income specified in Part II of the Table to that section which is to be charged to tax at any of the rates specified therein (other than the rate expressed to be chargeable on the remainder of taxable income) were one-half of the part so specified.

(2) Where the amount of relief allocated to the husband under subsection (1) (a) exceeds the income tax chargeable on the income of the husband for the year of assessment, the balance shall be applied to reduce the income tax chargeable on the income of the wife for that year, and where the amount of relief allocated to the wife under that paragraph exceeds the income tax chargeable on her income for the year of assessment, the balance shall be applied to reduce the income tax chargeable on the income of the husband for that year.

(3) Where the part of taxable income of a spouse chargeable to tax in accordance with subsection (1) (b) at a particular rate specified in Part II of the Table to section 8 of the Finance Act, 1980, is less than that of the other spouse and is less than the part of taxable income specified in column (1) of that Part (hereinafter referred to as ‘the appropriate part’) in respect of which the first-mentioned spouse is so chargeable to tax at that rate, the part of taxable income of the other spouse which, by virtue of that subsection, is to be charged to tax at that rate shall be increased by the amount by which the taxable income of the first-mentioned spouse chargeable to tax at that rate is less than the appropriate part.”.