Treatment of Married Couple under Personal Assessment

A married couple may elect for personal assessment to reduce their tax liability. Here you can find out what happens if both husband and wife elect for personal assessment, how personal assessment affects the carrying forward of business losses and how tax is allocated to each of the couple.

Electing for Personal Assessment as a Couple

If you are married and not living apart from your spouse, and both of you have income chargeable to tax, election for personal assessment must be made by you and your spouse jointly. Separate taxation for the couple is not applicable under personal assessment. When a married couple elect for personal assessment, the total income of the individual taxpayer, as appropriately reduced, is aggregated with that of his or her spouse to arrive at the joint total income of the couple for assessment.  

In his 2018-19 Budget, the Financial Secretary proposed to relax the requirement for the election of Personal Assessment commencing from the year of assessment 2018/19 by allowing married persons the option to elect personal assessment separately.

Joint Personal Assessment and Business Losses

“Losses” in the following context means the sum of business losses incurred in the year of assessment and losses brought forward from previous years under personal assessment. If the aggregate amount of your losses and deductions exceeds your total income, such excess must first be set off against the total income of your spouse before being carried forward. The maximum amount that can be carried forward to be set off against your total income for future years of assessment is the unabsorbed losses.

Allocation of Tax Payable

Normally, the tax payable on the joint assessment is proportionally allocated to each of the couple on the basis of their respective reduced total income. A notice of assessment is issued to each of them.

Further Information

More information on the treatment of married couple under personal assessment is shown in the example below.


For the year of assessment 2017/18, the assessable profits of Mr C’s sole proprietorship business were $460,000. Mrs C received monthly rent of $10,000 from a property under mortgage. She paid mortgage interest of $56,000 during the year.

Personal Assessment Elected       




Business profits (Mr C)



Property income (Mrs C)



-Net assessable value ($10,000 x 12 x 80%)



-Less: Mortgage interest



Total income



Less: Married person’s allowance



Net chargeable income



Tax thereon (at progressive rates)



Less: 75% tax reduction (capped at $30,000) (Note)



Tax payable






Mr C’s share of tax payable

($6,655 x 460,000 / 500,000)




Mrs C’s share of tax payable

($6,655 x 40,000 / 500,000)




Mr and Mrs C will each receive a notice of assessment and demand for payment.

(Note) For 2017/18, 75% of the final tax payable under profits tax, salaries tax and tax under personal assessment would be waived, subject to a ceiling of $30,000 per case.

Last revision date: November 2018
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