§ Lord Monsonasked Her Majesty's Government:
What would be the saving to the Exchequer if the total personal allowance which a married couple not entitled to age allowance could claim against their gross income for tax purposes were limited to the equivalent of the sum of the single individual's allowance plus the wife's earnings allowance.
The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie)The additional yield of income tax is estimated to be about £1½ billion in a full year at 1984–85 levels of income and allowances. This does not take account of any additional administrative cost which might be required.
§ Lord Monsonasked Her Majesty's Government:
What would be the cost to the Exchequer if either the whole or the first £2,000 of a married woman's investment income ceased to be aggregated with her husband's income for tax purposes.
The Earl of GowrieIt is not possible to specify a unique figure for the cost of disaggregating incomes of husband and wife, since the overall consequences would depend on the form taken by the personal allowances and other reliefs under the new system. On the basis of the recorded distribution of investment income between husband and wife, the overall cost, in 1984–85, of allowing an election for disaggregation, on the lines described in paragraphs 46–50 of the Green PaperThe Taxation of Husband and Wife 382WA (Cmnd. 8093), would be about £300 million. If only £2,000 of the wife's investment income could be disaggregated by such an election, the overall cost would be about £250 million.