1022 Special provisions relating to tax on wife’s income

Summary

This section applies where a couple are jointly assessed to tax. It allows the Revenue Commissioners to collect income tax from the non-assessable spouse where the assessable spouse has failed to pay the tax, or has failed to pay all the tax, assessed. The amount of unpaid tax which can be recovered from the non-assessable spouse is limited to that which is attributable to the income of the non-assessable spouse. In other words, the section does not allow Revenue to recover from the non-assessable spouse any unpaid tax assessed on the assessable spouse which is attributable to the income of the assessable spouse. The section also allows the assessable spouse to disclaim any liability for unpaid tax attributable to a deceased spouse’s income for any year in which he/she is assessed to tax on their combined income. This gives the assessable spouse the option, where there is unpaid tax which is attributable to a deceased spouse’s income, of ensuring than the tax is collected from the assets in the estate of the deceased spouse rather than from his/her income.

The provisions of the section also apply for the purposes of capital gains tax by virtue of section 1029.

Details

Application

(1) Where an assessment for any year is made on an individual (or on an individual’s trustee, guardian or committee or on an individual’s executors or administrators) and the Revenue Commissioners are of the opinion that, if the couple had been assessed separately, an assessment in respect of income tax would have been made on the spouse, or on the representative of, or on the executors or administrators of, the individual’s spouse then, if the whole or part of the tax due remains unpaid for 28 days after it is due, the Revenue Commissioners may, by notice in writing, require the non-assessable spouse to pay the amount which would have been assessed on the non-assessable spouse or the amount left outstanding (whichever is the lesser).

(2) Where such a notice is served on the spouse of the individual referred to in subsection (1), the same consequences are to follow in respect of liability to pay tax, priorities in bankruptcy, appeals, etc, as would have ensued if a separate assessment had been made on the spouse or the spouse’s representative or on the spouses executors or administrators.

Payment of interest on tax due

(3) The amount of tax required to be paid under the notice ceases to be recoverable under the original assessment. Similarly, the interest on overdue tax is calculated as if the amount which ceases to be recoverable had never been charged.

Appeal against a notice

(4) Where, as a result of an appeal against a notice, the amount of tax payable under it is reduced, the Revenue Commissioners will give such relief as appears just and reasonable to them. In this instance the amount of the reduction again becomes recoverable under the original assessment.

Information

(5) The Revenue Commissioners have the same powers in relation to obtaining information for the purposes of serving a notice under this section as they would in relation to making an assessment if an application for separate assessment under section 1023 had been in force.

Case of a deceased spouse

(6) A husband or wife has the right to disclaim liability for tax on the deceased spouse’s income for any year of assessment (or part of a year) for which he/she was assessed on their combined incomes. The notice of the disclaimer must be given to the executors or administrators and to the inspector within 2 months from the date of the grant of probate or letters of administration, subject to an extension of this time limit with the consent of the deceased spouse’s executors or administrators.

(7) The notice to the inspector is invalid unless it specifies the names and addresses of the deceased spouse’s executors or administrators.

(8) Where such a notice has been given to a deceased spouse’s executors or administrators and to the inspector, the Revenue Commissioners must exercise the powers contained in this section to recover the tax from the deceased spouse’s executors or administrators. The Revenue Commissioners must assess tax on, and collect it from, the deceased spouse’s executors and administrators —

• as if he/she was to be assessed separately for the year in question, and
• as if he/she had been assessed separately for previous years.

The words “all assessments previously made had been made accordingly” is used to ensure that the Revenue Commissioners may raise additional assessment(s) in relation to earlier years if he/she had been under-assessed in any of those years (for years to which Self Assessment applies, original assessments are usually amended).

(9) The Revenue Commissioners may delegate the operation of this section to Revenue officers nominated by them in writing.

Relevant Date: Finance Act 2019