Finance Act, 1980

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Assessments for 1979-80 and earlier years made after passing of Act.

21.—(1) In this section—

“assessment” includes an additional assessment;

“an assessment to which this section applies” means an assessment to tax made, on or after the passing of this Act, on an individual for a relevant year;

“relevant year” means the year 1979-80 or any earlier year of assessment;

“the relevant rate” means, as respects any of the years 1974-75 to 1979-80, the highest of the higher rates which applied for that year of assessment and, as respects any other relevant year, the rate equal to the aggregate of the standard rate of income tax for that year and the highest rate at which sur-tax was chargeable for that year;

“the relevant tax”, in relation to an individual, means the amount of tax for a relevant year which—

(a) would have been payable by the individual for that year, or

(b) in a case where the individual is a wife who was treated as living with her husband for that year, would have been payable for that year by the husband of the individual,

if an assessment in respect of the total income of the individual and of his spouse for that year had been made on the 6th day of October in that year on the individual or on the husband of the individual, as the case may be, being an assessment made on the basis and in accordance with the practice prevailing at that time;

“tax” means income tax or sur-tax or income tax and sur-tax as the context requires.

(2) Where, for a relevant year, an assessment to which this section applies is to be made on an individual (being a husband whose wife was treated as living with him for the relevant year or being a wife who was treated as living with her husband for that year) and, in consequence thereof, the aggregate of the tax, which would be payable for that relevant year by the individual and the spouse of the individual, is less than the amount of the relevant tax in relation to the individual for that relevant year, the provisions of subsection (3) shall apply in relation to the said assessment.

(3) Where the provisions of this subsection apply in relation to an assessment for a relevant year, then, notwithstanding anything in the Income Tax Acts but subject to the provisions of subsection (4)—

(a) the amount of income on which the individual is to be charged to tax shall be ascertained on the basis that section 138 of the Income Tax Act, 1967 , had not been in force and had no effect for that year,

(b) the assessment shall be made on the basis that the individual is to be charged to tax on his taxable income for the year at the relevant rate, and

(c) where the individual on whom the assessment is to be made is a married person, the assessment shall be made on the basis that he is not married and such assessments or adjustments of assessments shall be made as are necessary to secure that the individual and his spouse shall be charged to tax for the relevant year in all respects as if they were not married:

Provided that any income contained in an assessment made on a husband which, before the 12th day of October, 1979, in accordance with the practice prevailing at the time the assessment was made, was deemed to be his income shall not be regarded as income of any other person.

(4) Where the provisions of subsection (3) apply in relation to any assessment on an individual for a relevant year, such relief, if any, from tax shall be given as is necessary to secure that the aggregate amount of tax payable by the individual and his spouse for that year shall not exceed the relevant tax for that year, and, in a case where assessments to which this section applies are made on the husband and on his spouse, the relief to be given under this subsection shall be apportioned between them in such manner as is just and reasonable.