Income Tax Act (Cap. 123), article 49A

49A. * (1) In the case of a married couple, where both spouses are living together, any of the spouses may make an election for th e purposes of this article (hereinafter referred to as "a separat e return election") where: (a) during the year in which the election is made, each of the spouses derives income that is subject to tax under the provisions of article 4(1)(a) or (b), insofar as it does no t refer to any fees derived from the holding of an office of a director, or of article 4(1)(d) insofar as it refers to a pensi on which is received in vie w of a past employment; or *Applicable from year of Assessment 2021. INCOME TAX [CAP. 123. 157 Cap. 16. (b) in terms of a public deed concluded by the spouses, the property they acquire during their marriage is governed by the system of separate property or by the system of community of residue with separate administration as provided in article 1237(2) of the Civil Code or in terms of a foreign law that may be applicable to the property of the spouses that provides for any similar system, and that system still applies to them at th e time that the el ection is made. (2) A separate return election shall be made on such form and in such manner as the Commissioner may direct. (3) Unless the Commissioner approves otherwise, a separate return election shall ha ve effect in respect of the ye ar of assessment commencing on 1 Ja nuary of the year immediately following that in which the election is made and shall continue t o have effect in respect of each s ubsequent year of assessment un less and until it is revoked: Provided that an election submitted to the Commissioner before 1 January 2020 shall have effect as from th e year of assessment 2021. (4) Notwithstanding the provisions of article 49, and subject to the other provisions of this article, for any year o f assessment in respect of which a separate return election is ef fective: (a) the income of each spouse shall be charged to tax in the name of the respec tive spouse separately from the income of the other spouse, and each spouse shall be responsible for complying with the provisions of the Income Tax Acts relating to the submission of returns of his or her income and the ascertainment of that income; (b) the income of a spouse shall comprise all income derived by that spouse regardless of any right which the other spouse may have in respect of that income in virtue of the provisions of any law regulating the rights of the spouses over their property and income; (c) in the application of the provisions of this Act relating to the deductions allowable against the income of a spouse, expenses shall be deemed to have been incurred by the spouse in whose name the relativ e receipt is issued, and where a receipt is issued in the joint name of the spouses, the relat ive expense shall be deemed to have been incurred by the spouses in equal portions; and (d) any amounts of unabsorbed losses, unabsorbed 158 CAP. 123.] INCOME TAX capital allowances or unabsorbed tax credits brought forward from any year of assessment preceding that as from which a separate return option becomes effective shall be accounted for in the computation of the incom e of the spouse in whose name the income derived from the source that had given rise to the losses, capital allowances or tax credits in question is chargeable: Provided that any unabsorbed capital loss that had been incurred in a transfer made by a spouse shall be available as a deduction from any capital gains that may be derived by that spouse, and if the transfer had been made by the spouses jointly, the unabsorbed capital loss shall be available to the two spouses in proportion to the undivided shares transferred by them respectively. (5) ( a) when, in the year immedia tely preceding a year of assessment in respect of which a separate return election is effective: (i) a spouse derives rental income to which article 31D applies, that spouse shall be deemed to have exercised the option for the final tax as provided for in sub-article (2) of article 31D and shall consequently be liable for the payment of the final tax in accordance with sub-article (7) of article 31D; or (ii) a spouse derives investment income as defined in article 41(a) without deduction of tax, that spouse shall be required to report that income in his tax return for the said year of assessment and to pay tax on that income at the rate or rates determined in accordance with article 33, which tax shall be payable in such manner and by not later than such time as may be prescribed; (b)* the provisions of article 31D and the investment income provisions shall apply without regard to paragraph (a) if the charg eable income of the spouse for that year of assessment, disregarding the rental and investment income in question, is not less than the amount on which tax is chargeable at the rate of zero per cent (0%) in accordance with the provisions of article 56(1)(b) that are applicable to the chargeable income of the said spouse. (6) A married couple living together may revoke a separate return election by means of a notice in writing to the Commissi oner *Amendment applicable from the year of assessment 2027. Vide Article 13(2) of Act III of 2026 . INCOME TAX [CAP. 123. 159 subject to the following conditions: (a) the notice of revocation shall be made on such form and in such manner as may be approved by the Commissioner and shall be signed by both spouses; and (b) unless the Commissioner approves otherwise, the separate return election shall cease to have effect as from the year of assessment commencing on 1 January of the year immediately following that in which the notice of revocation is delivered to the Commissioner, and shall not be available again to the spouses in respect of that year or any one of the four (4) succeeding years of assessment. Separate computation on certain income derived by married couples. Added by: XXXVI.1990.9. Renumbered by: XVII. 1994.2. Amended by: XVII. 1994.19. Substituted by: XX.1996.13. Amended by: V . 1998.8; XI. 2000.6; II. 2002.52; VIII.2020.20.