Until 5 April 1990 the income and gains of a married woman
living with her husband were to be included in her husband's
return. TMA70/S8 has always provided that the person making a
return should include a declaration that the return is, to the best
of their knowledge, correct and complete. There was, however, no
legal machinery to enable a husband to force his wife to disclose
her income to him. If a husband was unable to return his wife's
income because she would not disclose it to him, he would have a
good defence against claims for penalties based on his own returns.
The husband had a duty to ascertain the nature and amount of
his wife's income and was guilty of negligence if he failed to make
proper enquiries of her about her income. If having made such
enquiries he was given incorrect information and was genuinely
deceived, he cannot be said to have been negligent. If a claim to
that effect is made, you should obtain all the facts preferably
interviewing both husband and wife before deciding whether the
husband was genuinely deceived or not. If the husband knew his
wife's income was understated and deliberately put it in a tax
return, he would be guilty of fraud. If he did not know the correct
amount of his wife's income because for whatever reason he did not
try to find out, we would contend that he had been negligent.
It follows that any contract settlement in respect of a
wife’s income for years up to 1989/90, should be made with
her husband. If any problems arise seek advice
Note
Where a married woman is a partner and a contract settlement
is negotiated with the partnership for any year, she signs the
offer in her own right.
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