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Edited version of private ruling
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Ruling
Subject: Education tax refund
Are you entitled to a full Education Tax Refund (ETR) when you have shared care of your child?
No.
This ruling applies for the following period
Year ended 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts
You share the care of your child with your ex partner.
You have a parenting agreement with your ex partner which states they will not contribute in any way to your child's education.
You are solely responsible for your child's education expenses.
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
Summary
You are not entitled to claim up to the maximum ETR as you have a Family Tax Benefit (FTB) shared-care percentage that needs to be applied in working out your claim for your child.
Detailed reasoning
Subdivision 61-M of the Income Tax Assessment Act 1997 (ITAA 1997) introduces 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 and up to a maximum of $780 and $1,558 respectively in the 2009-10 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 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 will depend on whether you have full care of your child. 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.
In your case you have shared care of your child, therefore your FTB shared-care arrangement with your ex-partner will be applied to the maximum ETR limit for your child.