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13 1993

FINANCE ACT, 1993

Chapter III

Taxation of Married Persons

Taxation of married persons.

10. —(1) As respects the year of assessment 1994-95 and subsequent years of assessment, the Income Tax Act, 1967 , is hereby amended, in Chapter I of Part IX, by the insertion of the following sections after section 195A (inserted by the Finance Act, 1983 ):

“Assessment on either spouse.

195B.—(1) In this section—

the basis year’, in relation to a husband and wife, means the year of marriage or, if earlier, the latest year of assessment preceding that year of marriage for which details of the total incomes of both the husband and the wife are available to the inspector at the time they first elect, or are first deemed to have duly elected, to be assessed to tax in accordance with the provisions of section 194;

year of marriage’ has the same meaning as it has in section 195A (inserted by the Finance Act, 1983 ).

(2) Subsection (3) shall apply for a year of assessment where, in the case of a husband and wife who are living together—

(a) (i) an election (including an election deemed to have been duly made) by the husband and wife to be assessed to tax in accordance with the provisions of section 194 has effect in relation to that year of assessment, and

(ii) the husband and the wife by notice in writing jointly given to the inspector before the 6th day of July in that year of assessment elect that the wife should be assessed to tax in accordance with the provisions of section 194,

or

(b) (i) the year of marriage is the year 1993-94 or a subsequent year of assessment, and

(ii) not having made an election under subsection (1) of section 195 to be assessed to tax in accordance with the provisions of section 194, the husband and wife have been deemed for that year of assessment, in accordance with the provisions of subsection (4) of the said section 195, to have duly made such an election, but have not made an election in accordance with the provisions of paragraph (a) (ii) for that year, and

(iii) the inspector, to the best of his knowledge and belief, considers that the total income of the wife for the basis year exceeded the total income of her husband for that basis year.

(3) Where this subsection applies for a year of assessment, the wife shall be assessed to tax in accordance with the provisions of section 194 for that year and, accordingly, references in section 194 or in any other provision of the Income Tax Acts, however expressed, to a husband being assessed, assessed and charged or chargeable to tax for a year of assessment in respect of his own total income (if any) and his wife's total income (if any) or to income of a wife being deemed for tax purposes to be that of her husband shall, subject to the provisions of this section and the modifications set out in subsection (6) and any other necessary modifications, be construed for that year of assessment as, respectively, references to a wife being assessed, assessed and charged or chargeable to tax in respect of her own total income (if any) and her husband's total income (if any) and to the income of a husband being deemed for tax purposes to be that of his wife.

(4) (a) Where, in accordance with subsection (3), a wife is, by virtue of subsection (2) (b), to be assessed and charged to tax in respect of her total income (if any) and her husband's total income (if any) for a year of assessment—

(i) in the absence of a notice given in accordance with the provisions of subsection (1) or (4) (a) of section 195 or an application made under section 197, the wife shall be so assessed and charged for each subsequent year of assessment, and

(ii) any such charge shall apply and continue to apply notwithstanding that her husband's total income for the basis year may have exceeded her total income for that year.

(b) Where a notice under section 195 (4) (a) or an application under section 197 is withdrawn and, but for the giving of such a notice or the making of such an application in the first instance, a wife would have been assessed to tax in respect of her own total income (if any) and the total income (if any) of her husband for the year of assessment in which the notice was given or the application was made, as may be appropriate, then, in the absence of an election made in accordance with the provisions of section 195 (1) (not being such an election deemed to have been duly made in accordance with the provisions of subsection (4) of that section), the wife shall be so assessed to tax for the year of assessment in which the aforesaid notice or application is withdrawn and for each subsequent year of assessment.

(5) Where an election is made in accordance with the provisions of paragraph (a) (ii) of subsection (2) for a year of assessment, the election shall have effect for that year and each subsequent year of assessment unless it is withdrawn by further notice in writing given jointly by the husband and the wife to the inspector before the 6th day of July in a year of assessment and the election shall not then have effect for the year for which the further notice is given or for any subsequent year of assessment.

(6) For the purposes of the other provisions of this section and as the circumstances may require—

(a) a reference in the Income Tax Acts, however expressed, to an individual or a claimant being a man, a married man or a husband shall be construed, respectively, as a reference to a woman, a married woman or a wife and a reference in those Acts, however expressed, to a woman, a married woman or a wife shall be construed, respectively, as a reference to a man, a married man or a husband, and

(b) any provision of the Income Tax Acts shall, in so far as it may relate to the treatment of any husband and wife for the purposes of those Acts, be construed so as to give effect to this section.

Repayment of tax in the case of certain husbands and wives.

195C.—(1) This section applies, for a year of assessment, in the case of a husband and wife, one of whom is assessed to tax for such year of assessment in accordance with the provisions of section 194 and to whom section 197 does not apply for such year.

(2) Where, for a year of assessment, this section applies in the case of a husband and wife, any repayment of tax which falls to be made in respect of the aggregate of the net tax deducted or paid under any provision of the Tax Acts (including a tax credit in respect of a distribution from a company resident in the State) in respect of the total income (if any) of the husband and of the total income (if any) of the wife shall be allocated to the husband and the wife concerned in proportion to the net amounts of tax so deducted or paid in respect of their respective total incomes:

Provided that this subsection shall not apply where a repayment, which but for the provisions of this subsection would not be made to a spouse, is less than £20.

(3) Notwithstanding the provisions of subsection (2), where the inspector, having regard to all the circumstances of a case, is satisfied that a repayment, or a greater part of a repayment, of tax arises by reason of some allowance or relief which, if the provisions of sections 197 and 198 had applied for the year of assessment, would have been allowed to one spouse only, he may make the repayment to the husband and the wife in such proportions as he considers just and reasonable.”.