The Resource Transferable personal allowances : a small step in the wrong direction

Transferable personal allowances : a small step in the wrong direction

Label
Transferable personal allowances : a small step in the wrong direction
Title
Transferable personal allowances : a small step in the wrong direction
Creator
Subject
Language
eng
Summary
Following the announcement by the Prime Minister in September 2013, the government introduced new rules in the Finance Act 2014 (FA 2014) permitting a limited transfer of unused personal allowances between married spouses and registered civil partners - but not unmarried couples. In this article, the author argues that transferable personal allowances between married spouses is a policy that should not be pursued, and that the FA 2014 measures should be repealed. Transferable allowances raise many of the same issues as the more fundamental question of choice of primary tax unit in the income tax system, that is, individual or joint spousal unit. In recent years some have gone so far as to suggest it may be time to rethink the choice of individual for the income tax unit. A second aim of this article is to contribute to that wider debate. After a brief summary of the new transferable allowances, this article begins by revisiting the history behind the move from joint taxation of spouses to independent taxation. It examines the policy arguments for and against individual versus joint taxation in general and transferable allowances in particular. As will be shown, there are many reasons why the tax system should focus on individuals and avoid commingling the income tax affairs of persons unneccessarily simply because they are in a particular form of personal relationship. Furthermore, attempts by politicians to favour marriage through tax measures such as transferable allowances are misguided. The recent introduction of a limited form of transferable allowances admittedly represents only a small step away from individual tax unit down the path towards joint taxation, but it is a small step in the wrong direction
Citation source
In: British tax review. - London. - (2015),
http://library.link/vocab/creatorName
Loutzenhiser, G
Geographic coverage
  • European Union
  • Europe
Language note
English
http://library.link/vocab/subjectName
  • individual income tax
  • personal allowances
  • tax unit
  • joint taxation
  • spouse
Label
Transferable personal allowances : a small step in the wrong direction
Instantiates
Publication
Label
Transferable personal allowances : a small step in the wrong direction
Publication

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