Guide to managing your tax debt

Serious hardship

Serious hardship exists when payment of the debt would leave you unable to provide food, accommodation, clothing, medical treatment, education or other necessities for yourself, your family or other dependants.

If you are experiencing serious hardship you can apply for release from payment of some or all of the following tax liabilities:

• income tax
• fringe benefits tax
• fringe benefits tax instalments
• pay as you go instalments
• some of the associated penalties and charges.

Individual taxpayers and taxpayers who are operating a business as a sole trader can apply for release, but entities such as companies, trusts and partnerships cannot.

You will need to provide details of your family's expenses and assets, your income and your spouse's income, and attach recent bank statements and other supporting evidence.

Refer to Release from your tax debt to apply.

Assets such as your home, motor vehicle, household goods, tools of trade and savings for necessities are regarded as normal and reasonable and we will generally not expect you to sell them in order to pay your debt. However, you may be expected to sell non-essential assets, or use them as security for a loan, including:

• caravans (unless the caravan is your home)
• holiday homes
• investment properties
• luxury motor vehicles
• boats
• substantial life assurance or annuity entitlements
• shares and other investments.

Sections within Help with paying your tax debt

• How much tax do you owe?
• Making a payment arrangement
• Assessing business viability
• Payment options
• Serious hardship
• People affected by natural disasters
• Non-pursuit of tax debts
• Disputing your debt