Edited version of private ruling

Authorisation Number: 1011682982151

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

Subject: Spouse tax offset eligibility

Question

Are you entitled a spouse tax offset for the relevant year?

Answer:

No

This ruling applies for the following period

Year ended 30 June 2010

The scheme commenced on

1 July 2010

You claimed the spouse tax offset in the year.

At the time you made the claim for spouse tax offset you were not married.

You were married to your spouse in the future income year.

Your spouse is now living with you in Australia.

Your spouse is on a tourist visa for 6 months.

Prior to your marriage, your spouse was living overseas, and you have provided evidence that you financially supported your spouse there prior to your marriage.

Reasons for decision

Subsection 159J of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a taxpayer is entitled to a tax offset where, during the year of income, they contributed to the maintenance of a spouse who is a 'resident of Australia'.

A spouse is defined in section 995-1 of the Income Tax Assessment Act 1997 as a wife to whom you are legally married, or a person who lives with you on a genuine domestic basis as your wife.

A 'resident of Australia' is defined in subsection 6(1) of the ITAA 1936. Subsection 159J(3A) of the ITAA 1936 provides that, in applying the definition of resident in subsection 6(1) of the ITAA 1936, for the purposes of the dependant spouse tax offset the dependant spouse of a taxpayer will be taken to have the same domicile as the taxpayer.

The taxpayer's spouse is therefore, deemed to have a domicile in Australia for the purposes of the definition of resident in subsection 6(1) of the ITAA 1936. Subsection 6(1) of the ITAA 1936 defines a resident to include a person whose domicile is in Australia, unless the Commissioner is satisfied that their permanent place of abode is outside Australia.

The leading case on permanent place of abode is Applegate v. FC of T 79 ATC 4307; (1979) 9 ATR 899. The Federal Court stated that in respect of the definition of 'resident', a permanent place of abode does not have to be everlasting or forever but it is rather used in contrast to temporary or transitory. Taxation Ruling IT 2650 also considers residency and permanent place of abode outside Australia. Paragraph 12 of IT 2650 states that 'place of abode' refers to a person's residence, where one lives with one's family and sleeps at night. In essence, a person's 'place of abode' is that person's dwelling place or the physical surroundings in which a person lives.

Where a taxpayer marries while overseas, the spouse is considered to have a permanent place of abode in Australia, provided the spouse has taken timely and appropriate steps to migrate to Australia.

In your case, until you were legally married, your spouse did not live with you on a genuine domestic basis nor did they live in Australia. The Commissioner considers the permanent place of abode prior to your marriage to be overseas. While we accept that you contributed to the maintenance of your spouse prior to marrying, and after your marriage they has travelled to Australia on a tourist visa, they do not fit the definition of a spouse and was not a resident of Australia. You are therefore not entitled to a spouse tax offset for the income year.