Income splitting is a tax policy of attributing earned income of one spouse to the other spouse for the purposes of assessing personal income tax i.e. "splitting" away the income of the greater earner, reducing his/her income for tax measurement purposes, thus reducing tax rates paid by the family as a whole. New Zealand tax laws do not support or facilitate income splitting.
New Conservative would introduce income splitting for families with couples in a legally recognised relationship such as marriage. We recognise the economic hardships many families experience as they try to do best by their children. We propose that families who meet this criteria be eligible to split their income in order to take advantage of lower tax brackets. This will result in a better financial position for a substantial proportion of New Zealand families who have chosen to limit the working hours of one parent for the wellbeing of their children.