We have recently married/entered a civil partnership. How will we be assessed?
In the year that a couple marry/enter a civil partnership, both individuals will be treated as single for tax purposes; each spouse/partner will receive their own income tax return, their own assessment and each will be responsible for any tax due.
You will then have the option to elect for joint taxation in the next tax year. In the absence of any election, you will continue to be assessed individually.
What is joint taxation?
Joint taxation is optional, and where it has been requested:
- a couple will be jointly and severally liable for all of their joint tax affairs;
- a couple can use their tax allowances jointly (time apportioned for couples not resident for the whole tax year);
- tax relief for any allowable deduction will be given jointly;
- forms and correspondence will be addressed to both spouses or partners;
- a joint tax assessment will be made that maximises the benefit of allowances, deductions and tax rate bands.
How do I elect for joint taxation?
An election for joint taxation must be made no later than:
- 31 December in the income tax year in which you wish to be jointly assessed; or
- 6 months following the date of commencement of residence, if later.
To make an election both spouses/partners must sign and complete an Application for Joint Taxation and/or Nominated Addressee R156 form.
We are married/civil partners who have just moved to the Island. How will we be assessed?
When completing the Registration for Manx Income Tax, complete Section 26 of the form to indicate that you would like to be jointly taxed, and send a copy of your marriage/civil partnership certificate with the form. In the absence of any election you will be assessed independently.
We have joint payments and income how will they be treated?
Relief for any allowable deductions is given to the person who made the payment. Joint payments are allocated on an equal basis unless shown that the allocation should be different.
My spouse/partner and I would like to be independently taxed, what must we do?
If you have recently married/entered a civil partnership or are a new resident, you do not need to do anything as the default position is independent taxation. If you are currently jointly assessed, either you or your spouse/partner must complete a Revocation of Joint Taxation Treatment.
Can we transfer unused personal allowances to each other?
If you are jointly assessed, all allowances, deductions and 10% band will be automatically off-set against the joint income of both persons when being assessed. During the year, it is possible to offset unused allowances etc. from one spouse/partner to another by contacting the Division and a subsequent change being made to each person’s tax codes.
If you are independently assessed, you will not be able to transfer allowances, deductions or the 10% band. The restriction on the transfer of unused amounts could result in an increased combined liability. Practice Note 131/06 'Taxation of Married Couples' contains further information. Please note that any references to husband and wife contained within the Practice Note apply equally to civil partners and same sex married couples.