Minister puts forward long-awaited married tax reform plan

Friday 22 November 2019

Long awaited proposals to give both spouses or civil partners equal responsibility for their tax affairs have been submitted today by the Treasury Minister.

If approved, the plans could be the first major change to the island’s personal tax system in almost a century.

The proposals, submitted today by Treasury Minister Deputy Susie Pinel on behalf of the Council of Ministers, aim to begin a process to modernise what has been described as an “archaic” tax system.

Left unchanged since Income Tax was implemented in 1928, the current system has been the subject of much criticism due to its “outdated” nature. 

Pictured: The Minister's proposition allows for spouses and civil partners to have joint responsibility for their tax affairs.

Such features of the current system which are now up for reform include the controversial obligation for a married man to give permission for his wife to participate in her own tax affairs.

Due to these features being so ingrained within the island’s tax law, it will take until 1 January 2021 to redraft the legislation so that both spouses and civil partners can discuss their tax affairs and update their information with Revenue Jersey.

Under the Minister’s proposition – which will come into effect in 2022 for the tax year of assessment 2021) – the couple:

• will still receive a joint return, but will both have rights to sign it;
• will both be responsible for completing and lodging it accurately and on time;
• and will both be liable for the payment of all personal income tax due from the couple.

Any couple who would prefer not to have a joint return can opt for ‘separate assessment’ which allows for an administrative separation of their tax returns, but still means they will be assessed as a couple for the purposes of tax. 

Although not forming part of these proposals, the Minister is also committing to bringing fully independent taxation by 2023 – for the tax year of assessment 2022. This will mean that every taxpayer – single, married or in a civil partnership – will be treated as an individual for the purpose of tax.

Pictured: Fully independent taxation has been promised by 2023.

The current plan, Express understands, is for independent taxation to be introduced in phases to reduce the sudden impact of drastic changes on islanders.

Deputy Susie Pinel said: “This reform to married taxation is the first step towards fulfilling my commitment to reform Jersey’s personal income taxation and create an independent tax system that delivers equal treatment for all and no longer treats women as chattels. 

“Due to the impact that any sudden changes could have on islanders, a gradual approach towards independent taxation will ensure that we do not impose any unnecessary hardship on taxpayers. I expect to introduce a suitable form of independent taxation for the 2022 tax year of assessment.”