§ Dame Jill Knight
To ask the Chancellor of the Exchequer if he will set out the benefits of independent taxation for married women.
§ Mr. Lilley
Independent taxation, which took effect on 6 April 1990, offers all married women the opportunity to enjoy independence and privacy in their own tax affairs.
Every married woman is now entitled to a personal allowance and basic rate band in her own right, which she can set against her own income of any kind. This includes any income which she may have from savings or investments, and any state retirement pension which she may receive by virtue of her husband's national insurance contributions. The allowance is given at higher, age-related levels if she is aged 65 or over, subject to her own income limit.
Almost 3 million wives (just under half of all wives on whose income tax is charged) will have less tax charged on their income, because they will have their own personal allowance and their income will no longer be taxed as if it belonged to their husband. These changes remove the tax penalty on marriage because the tax payable on a married woman's income will now never exceed—as it could previously—the tax payable by a single woman on the same income.