• Same-sex relationships and income tax

    In 2008, the government passed legislation to ensure that same-sex couples and families are treated the same way as other couples and families for income tax and superannuation purposes.

    The legislation expanded key terms such as 'spouse' and 'child' to recognise the relationships of same-sex couples and their children.

    These changes may affect the information that you need to provide in your income tax return.

    The income tax changes apply from 1 July 2009 onwards. They do not apply to previous years.

    The superannuation changes came into effect from 1 July 2008.

    Income tax impacts

    The income tax changes mean that if you have a spouse, you may now be eligible for the following tax offsets:

    It may also affect your claim for a zone or overseas forces tax offset.

    You still need to meet certain criteria's to be eligible for these tax offsets.

    If your relationship ends, the changes may also affect your access to:

    Recognition of a same-sex relationship may also affect:

    New definitions

    What is the definition of a spouse?

    Your spouse includes another person (whether of the same or opposite sex):

    • who you were in a relationship with that was registered under a prescribed state or territory law, or
    • who, although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.

    What is the definition of a child?

    Each of the following is also the child of an individual:

    • the individual's adopted child, stepchild or ex-nuptial chid
    • a child of the individual's spouse
    • someone who is a child of the individual within the meaning of the Family Law Act 1975.

    Common questions

    What relationships are impacted?

    Both de facto relationships and registered relationships are now recognised.

    A de facto relationship is where two people who are not legally married live together on a genuine domestic basis in a relationship as a couple.

    A registered relationship is one that is registered under certain prescribed state and territory laws that provide for registration of relationships. Currently, Victoria, New South Wales, Queensland, Tasmania and the Australian Capital Territory provide for the registration of a relationship.

    When were the changes implemented?

    The changes to recognise same-sex relationships took effect for superannuation purposes on 1 July 2008 and for Income tax purposes from 1 July 2009.

    Why does the ATO need to ask my gender and spouse details?

    There are times when we will ask you for:

    • your salutation (Miss, Mrs, Ms, Mr or other)
    • your gender (male, female or indeterminate)
    • your spouse's name and date of birth
    • your spouse's gender (male, female or indeterminate)
    • your spouse income details.

    This may be to:

    • establish proof of your identity
    • consent to repay your spouse's Family Assistance debt
    • transfer any unused portion of the seniors and pensioners tax offset (SAPTO) to your spouse.

    If both you and your spouse are eligible for the seniors and pensioners tax offset and one of you does not use all of it, the unused portion may be available for transfer to the other person. We will work this out automatically and transfer any entitlement.

    See also:

    How should I complete my tax return if I am still married but now in a genuine same-sex de facto relationship?

    Generally, you should complete your income tax return based on your domestic situation on 30 June of the relevant financial year.

    Example:

    Adam is married to Tanya but separated from Tanya to move in with David. Since that time Adam and David have been living together in a genuine domestic relationship as a couple. Prior to separating from Tanya, Adam completed his income tax return recognising Tanya as his spouse, while David completed his income tax return as a single person. From 1 July 2009, both Adam and David will complete their income tax returns recognising each other as a spouse.

    End of example

    What happens if our same-sex relationship ends?

    From 1 July 2009, a person who was in a same-sex relationship may be recognised as a 'former spouse' under a 'family law obligation'. This means that you may be eligible for:

    • capital gains tax (CGT) rollover relief if the family home was transferred to you as part of a relationship breakdown settlement, and
    • a share of the first home saver account contributions made by you while you were living together in a genuine domestic relationship as a couple.

    Example:

    Richard and Damian have lived together as a couple in Canberra since March 2006. In 2007 they purchased their joint home and, in 2009, when the Australian Capital Territory Government passed legislation allowing same-sex couples to register their relationship they were among the first to formally recognise their union. Richard and Damian separated during the financial year 2009-10 (after 1 July 2009). Damian wished to remain in the home and negotiated with Richard to transfer his share as part of the relationship breakdown settlement.

    As the transfer date of the property from Richard to Damian (the transferee spouse) was after 1 July 2009, Damian will be able to apply for CGT rollover relief.

    See also:

    End of example

    See also:

      Last modified: 05 Oct 2016QC 21447