Vote on taxing couples independently next month

Wednesday 04 August 2021

A 93-year-old law that makes a husband legally responsible for his wife’s tax affairs is likely to be changed next month.

Treasury Minister Deputy Susie Pinel has lodged a proposal which updates the island’s income tax law, introduced in 1928, which will result in married couples and those in civil partnerships to be taxed independently.

Currently, married couples and civil partners are assessed together for tax. This means that they normally fill out one tax return per couple. For married couples, the man - or the older person in a same-sex marriage or civil partnership - is legally responsible for the couple's tax. 

This includes filling out the form, receiving the couple’s tax bill, and taking responsibility for paying the bill.  

Under the proposed independent taxation reforms, both partners in a marriage or same sex civil partnership will be treated equally. This means that each person would complete their own tax return, receive their own tax bill and be responsible for paying it.

In the proposed amendment to the law - due to be debated by the States Assembly next month - arrivals to the island from January 2022 will automatically be registered for independent taxation. 

There will be no change for those who are taxed as a single person.

Pictured: If the Treasury Minister’s plans are accepted, then independent taxation for couples will be phased in across 2022-2023.

A pilot scheme is planned for those couples who are already separately assessed for tax purposes to choose to be moved to independent taxation from the start of next year.

There will be a voluntary opt-in period from 2023 but, at some point in the future which is yet to be be determined, all married couples and civil partners will have to move to independent taxation.

Deputy Pinel said: “This amendment law is the first step to reforming our antiquated and archaic rules around tax, and ensuring that every Islander who pays into our tax system is treated equitably.

“I’m committed to supporting Islanders through this change and ensuring that no-one is detrimentally affected by the move to Independent Taxation. More detailed information will be made available in the coming months.”

Pictured: Treasury Minister Deputy Susie Pinel described the current rules as “antiquated and archaic”.

The Deputy added that Revenue Jersey was not able to answer any questions about the personal impacts of independent taxation at this early stage.

This lodging of this amendment is the latest step on a long road to reform - early last year,States Members voted nearly unanimously on “long overdue” changes to give both partners equal rights and responsibilities over their tax affairs.