ATO Interpretative Decision

ATO ID 2002/826 (Withdrawn)

Income Tax

First Child Tax Offset (Baby Bonus) - transfer to same sex partner
FOI status: may be released

This ATO ID is withdrawn on the basis that the definition of a spouse at section 995-1 of the ITAA 1997 has been amended to include same sex couples.

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Can the taxpayer, a parent entitled to the first child tax offset (baby bonus), transfer the baby bonus to their same-sex partner under section 61-385 of the Income Tax Assessment Act 1997 ('ITAA 1997')?

Decision

No. The taxpayer, a parent entitled to the baby bonus, cannot transfer the baby bonus to their same-sex partner under section 61-385 of the ITAA 1997.

Facts

The taxpayer is the parent of a child in respect of whom they are entitled to a baby bonus.

The taxpayer is a member of a same-sex relationship.

Reasons for Decision

A taxpayer's primary entitlement to the baby bonus is established under section 61-355 of the ITAA 1997.

Section 61-385 of the ITAA 1997 allows the entitlement to the baby bonus to be transferred from the person who is primarily entitled to the baby bonus to their spouse in certain circumstances.

For income tax purposes, the term 'spouse' has the meaning given to it by the definition in section 995-1 of the ITAA 1997. That definition states that the:

' spouse of a person includes a person who, although not legally married to the person, lives with the person on a genuine domestic basis as the person's husband or wife.'

There is no requirement in the definition that there be a legal marriage according to the laws of Australia or another nation. However the definition states that the person must live with the person on a genuine domestic basis as the person's 'husband' or 'wife'. The terms 'husband' and 'wife' is not defined in tax legislation, therefore the ordinary meaning of the terms are used.

The ordinary meaning of 'husband and wife' was examined in Gregory Brown v. Commissioner for Superannuation (1995) 38 ALD 344 at page 349; (1995) 21 AAR 378 at page 383 where the Administrative Appeals Tribunal stated:

'For whatever other changes the words "husband" and "wife" may have undergone over the years they retain, in our opinion, their complementary gender connotations. A "wife" is the female partner of a marital relationship and a "husband" the male partner.'

The relationship between the taxpayer and the taxpayer's partner does not fall within the ordinary meaning of 'husband and wife' because the taxpayer's partner is of the same sex as the taxpayer. Therefore the taxpayer's partner does not satisfy the definition of a 'spouse' under section 995-1 of the ITAA 1997 as the taxpayer and the taxpayer's partner are not living on a genuine domestic basis as 'husband and wife'.

As the taxpayer's partner is not their spouse, the taxpayer is unable to transfer their entitlement to the baby bonus to their partner under section 61-385 of the ITAA 1997.

Date of decision: 18 July 2002

Year of income: Year ended 30 June 2002

Legislative References:
Income Tax Assessment Act 1997
   section 61-355
   section 61-385
   section 995-1

Case References:
Gregory Brown v. Commissioner for Superannuation
(1995) 21 AAR 378
(1995) 38 ALD 344

Keywords
De facto relationships
Rebates
Spouse

Business Line: Small Business/Individual Taxpayers

Date of publication: 21 August 2002

ISSN: 1445-2782

history

	Date:	Version:
	18 July 2002	Original statement
You are here	16 April 2010	Archived

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