Edited version of private ruling

Authorisation Number: 1011604710386

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Ruling

Subject: Education tax refund

Are you entitled to claim part of an education tax refund (ETR) when you had a shared-care arrangement with your former spouse?

Yes.

This ruling applies for the following period

Year ended 30 June 2009

The scheme commenced on

1 July 2008

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You have a child attending primary schooling.

You incurred expenses which meet the eligible education expenses.

You had a shared-care arrangement with your former spouse. Your shared-care percentage was determined by the Family Assistance Office (FAO).

You were entitled to receive Family Tax Benefit Part A but gave up the payments to your former spouse.

Your former spouse did not claim the education tax refund.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subdivision 61-M

Income Tax Assessment Act 1997 Section 61-610

Income Tax Assessment Act 1997 Section 61-670.

Reasons for decision

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.

Summary

You are entitled to a part claim of the ETR as you have a shared-care percentage determined by FAO that needs to be applied in working out your claim.

Detailed reasoning

Subdivision 61-M of the Income Tax Assessment Act 1997 (ITAA 1997) introduced a refundable tax offset for eligible education expenses. The 50 per cent offset applies to eligible expenditure of up to a maximum of $750 for children undertaking primary studies and $1,500 for children undertaking secondary studies in the 2008-09 income year.

Section 61-610 of the ITAA 1997 sets out three tests before an individual can claim the ETR. These are the eligible individual test, the schooling requirement test and the educational expenses test.

Generally, an individual must be entitled to receive Family Tax Benefit Part A payment for a child enrolled or registered in a primary or secondary school studies. The educational expenses test provides a list of items that support a child's primary or secondary education.

In your case, you satisfy the eligibility requirements as you meet all the three tests set out in section 61-610 of the ITAA 1997.

However, how much ETR you can claim depends on whether you have full care of your children. Section 61-670 of the ITAA 1997 provides a special rule for calculating the offset limit in situations where a person satisfies the eligible individual test, but has a shared-care arrangement in relation to the child. In these cases, the offset limit is apportioned according to the degree of shared-care or, in certain cases as agreed between the partners.

In your case, your shared-care arrangement determined by FAO with your former spouse will be applied to the maximum offset limit.