§ Baroness Jegerasked Her Majesty's Government:
Why the earned income of wives may be taxed separately from that of their husbands while their unearned income is deemed to be that of their husbands for taxation purposes.
§ Lord CockfieldThe normal rule is that both the earned and investment incomes of married couples are aggregated for income tax purposes. The option for separate taxation introduced in 1971 was restricted to the wife's earned income because it was intended specifically to remove the disincentives for working wives which might otherwise arise from aggregation.
The tax treatment of both the earned and investment income of married women is one of the issues discussed in the Green Paper The Taxation of Husband and Wife (Cmnd. 8093). The Government 586WA are now considering the wide-ranging responses received to that paper.