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Edited version of private ruling
Authorisation Number: 1011608241120
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Ruling
Subject: tax offsets
1. Are you entitled to a dependent spouse tax offset?
Yes.
2. Are you entitled to a private health insurance tax offset?
No.
This ruling applies for the following period:
1 July 2009 to 30 June 2010
The scheme commences on:
1 July 2009
Relevant facts and circumstances
You and your spouse and children are work 457 visa holders.
You commenced work in Australia in early 2010.
You have private health insurance coverage for yourself and your family.
You do not have access to Medicare benefits.
Neither you nor your spouse was eligible for family tax benefit (FBT) Part B.
Your adjusted taxable income (ATI) did not exceed $150,000 and your spouse's ATI did not exceed $9,254 in the 2009-10 income year.
Detailed reasoning
Question 1
Under section 159J of the Income Tax Assessment Act 1936, a taxpayer maintaining a person who is a dependant, as specified in that section, may be entitled to a tax offset.
A taxpayer maintains a dependant if they live in the same house and the taxpayer gave them food, clothing and lodging or helped them pay for their living, medical and educational costs.
A taxpayer is eligible to claim a dependent spouse tax offset for any period in 2009-10 that they had a spouse and met all following conditions:
· the taxpayer maintained their spouse
· the spouse was a resident
· the taxpayer was a resident at any time in 2009-10
· neither the spouse (if they were the taxpayers spouse during that period) nor the taxpayer were entitled to FTB Part B or were only entitled to it at the shared-care rate
· The taxpayer had adjusted taxable income less than $150,000
· The spouse has adjusted taxable income less than $9,254.
As you are considered a resident since your arrival in Australia and are not entitled to FTB Part B, you meet all the conditions for claiming a dependent spouse tax offset. You are therefore entitled to a partial spouse tax offset for the 2009-10 income year from the date of arrival in Australia. To work out the spouse tax offset you can claim refer to page 58 (adjusted taxable income) and page 61 (dependent spouse tax offset worksheet) of the publication NAT 0976-6.2010 TaxPack 2010.
Detailed reasoning
Question 2
Section 61-205(1) of the ITAA 1997 states; if you are an individual (other than an individual in the capacity of an employer), you are entitled to a tax offset for the 2007-08 income year or a later income year if:
(a) a premium, or an amount in respect of a premium, was paid by you, or by your employer as a fringe benefit for you, under a complying private health insurance policy (within the meaning of the Private Health Insurance Act 2007), on or after 1 July 2007, and
(b) the premium, or amount in respect of a premium, was paid during the income year, and
(c) each person insured under the complying health insurance policy during the period covered by the premium or amount is, for the whole of the time that he or she is insured under the policy during that period, an eligible person within the meaning of section 3 of the Health Insurance Act 1973, or treated as such because of section 6, 6A or 7 of that Act.
Subsection 3(5) of the Medicare Levy Act 1986 (MLA 1986) states that a person is covered by an insurance policy that provides private patient hospital cover if the policy is a complying health insurance policy (within the meaning of the Private Health Insurance Act 2007 (PHIA 2007)) that covers hospital treatment.
The Private Health Insurance Administration Council (PHIAC) administers the PHIA 2007 and maintains on its website (www.phiac.gov.au) an up to date record of all private health insurers providing complying policies.
Your health insurance provider does not appear on the PHIAC's website. Therefore their policy is not a complying health insurance policy within the meaning of the PHIA 2007 and does not satisfy the requirement of subsection 3(5) of the MLA 1986. Therefore, you are not entitled to the private health insurance tax offset for the 2009-10 income year.
We acknowledge your specific circumstances, however there is no discretion under the current legislation to allow a private health insurance tax offset in your case.
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