XN000022-1989-09-07 — Page 3

THURSDAY, SEPTEMBER 7, 1989'

"THAT IS AN 'UNABSORBED ALLOWANCE'. WHILE HIS OR HER SPOUSE WHO HAS ALSO DERIVED ASSESSABLE INCOME CONTINUES TO BE CHARGEABLE TO TAX: OR THE BENEFIT OF SEPARATE TAXATION IS LESS THAN THE TAX BENEFIT DERIVED BY THE MARRIED COUPLE FROM ONE MARRIED PERSON'S ALLOWANCE RATHER THAN TWO BASIC ALLOWANCES. WHICH IS $2,000 LESS IN TOTAL,' EXPLAINED.

IT

HE

"APART FROM THE QUALIFYING REQUIREMENT FOR ONE SPOUSE TO HAVE AN UNABSORBED ALLOWANCE WHILE HIS OR HER SPOUSE IS CHARGEABLE TO TAX OR THERE BEING A TAX BENEFIT TO THE COUPLE, THE RULES GOVERNING THE JOINT ASSESSMENT PROCEDURE ARE RELATIVELY SIMPLE то ADMINISTER, OPERATE AND UNDERSTAND." HE ADDED.

TURNING TO THE CONDITION UNDER WHICH CHILD ALLOWANCE WAS GRANTED, MR AU-YEUNG SAID THIS NOW REQUIRED THAT WHERE A HUSBAND AND WIFE COULD BOTH CLAIM THE ALLOWANCE, THEY MUST NOMIATE WHICH OF THEM WOULD CLAIM THEIR FAMILY'S ENTITLEMENT IN A SINGLE SUM.

IS

"BECAUSE CHILD ALLOWANCES ARE TIERED, WITH DIFFERENT CHILDREN WITHIN THE FAMILY ATTRACTING DIFFERENT LEVELS OF ALLOWANCES, IT NECESSARY TO PREVENT TWO-INCOME FAMILIES FROM SPLITTING THEIR CHILDREN INTO SUB-UNITS FOR CHILD ALLOWANCE PURPOSES.

"IF THIS WAS NOT THE CASE. THEN IT WOULD BE POSSIBLE FOR THESE FAMILIES TO PLACE THEMSELVES IN A SUPERIOR ALLOWANCE POSITION VIS-A- VIS SINGLE INCOME FAMILIES WITH THE SAME NUMBER OF CHILDREN, HE SAID.

THE COMMISSIONER ALSO POINTED OUT THAT THE DEFINITION OF "CHILD" IN RELATION TO CHILD ALLOWANCE HAD BEEN SIGNIFICANTLY EXPANDED TO INCLUDE NATURAL, ADOPTED AND STEP CHILDREN OF EITHER THE TAXPAYER OR HIS OR HER SPOUSE OR FORMER SPOUSE.

"EX-NUPTIAL CHILDREN ARE NOW ALSO SPECIFICALLY INCLUDED WITHIN THE DEFINITION, HE ADDED.

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MR AU-YEUNG SAID THE ELECTION PROVISIONS OF PERSONAL ASSESSMENT HAD BEEN AMENDED TO ALIGN THEM MORE CLOSELY WITH THE SPIRIT OF THE SALARIES TAX LEGISLATION.

"FROM APRIL 1. 1990 ANY RESIDENT PERSON OF 18 YEARS OF AGE AND OVER. INCLUDING MARRIED WOMEN, WILL BE PERMITTED TO ELECT PERSONAL ASSESSMENT AND BE RESPONSIBLE FOR HIS OR HER OWN TAXATION AFFAIRS, HRE SAID.

"

HER

"HOWEVER, WHERE THE PERSON ELECTING IS MARRIED AND HIS OR SPOUSE HAS ALSO DERIVED INCOME CHARGEABLE TO TAX, THEN THAT PERSON CANNOT MAKE AN ELECTION UNLESS THE SPOUSE ALSO ELECTS TO BE PERSONALLY ASSESSED, HE NOTED.

"INCOME OF MARRIED COUPLES WILL CONTINUE TO BE ASSESSED UNDER AGGREGATION, BUT UNLIKE PREVIOUSLY, WHEN SEPARATE ASSESSMENTS WERE OPTIONAL. EACH SPOUSE WILL NOW AUTOMATICALLY RECEIVE A SEPERATE ASSESSMENT FOR HIS OR HER APPORTIONED SHARE OF THE TOTAL TAX PAYABLE, HE SAID.

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"AS A CONSEQUENCE OF THE AMENDMENTS TO THE PERSONAL ASSESSMENT LEGISLATION, MARRIED COUPLES WILL NOW BE REQUIRED TO JOINTLY COMPLETE A PERSONAL ASSESSMENT RETURN, MR AU-YEUNG POINTED OUT.

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