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Ruling
Subject: Eligibility for Dependant Spouse Tax Offset
Question 1
Are you eligible to claim the dependant spouse tax offset?
Answer
Yes
This ruling applies for the following periods
Year ended 30 June 2011
Year ended 30 June 2012
The scheme commences on
29 September 2010
Relevant facts
You are an Australian resident and earn income in Australia.
You met your spouse overseas in 2006 and have a child who was born in 2007. They continued to live overseas. You visited your spouse and child overseas and have financially supported your family.
Your spouse and child applied for an Australian immigration visa in late 2010 and they received their visa in mid 2011.
They travelled to Australia and arrived approximately one month after receiving their visa.
You have claimed Family Tax Benefit Part B from the arrival of your spouse and child in Australia.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 159J
Income Tax Assessment Act 1936 subsection 6(1)
Income Tax Assessment Act 1997 section 995-1
Reasons for decision
You are eligible to claim a dependent spouse tax offset for any period under section 159J of the Income Tax Assessment Act 1936 (ITAA 1936), in the income year that you had a spouse and you met ALL these conditions:
o you maintained your spouse
o your spouse was a resident
o you were a resident at any time in the relevant year
o neither you nor your spouse (during any period they were your spouse) was eligible to family tax benefit (FTB) Part B or was eligible for it only at the shared-care rate.
A spouse can be married or de facto. According to the section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) a spouse of a person is defined as including 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.
If your spouse was overseas during the year claimed she will be considered to be your dependent for tax offset purposes if you were taking the steps necessary for her migration in a timely manner. This includes applying for a permanent residency visa.
The residency tests the ATO uses to determine your residency status for tax purposes are not the same as those used by other Australian agencies for other purposes such as immigration.
Subsection 6(1) of the ITAA 1936 defines a 'resident' or a 'resident of Australia'. The definition provides four tests to ascertain whether a person is a resident of Australia for income tax purposes. These tests are:
(1) residence according to ordinary concepts (primary test)
(2) domicile and permanent place of abode test (first statutory test)
(3) 183 day rule (second statutory test)
(4) Commonwealth superannuation test (third statutory test).
Under the domicile and permanent place of abode test, a person will be a resident of Australia if he or she has an Australian domicile, unless the Commissioner is satisfied that the person has established a permanent place of abode outside Australia.
A spouse who is waiting to migrate to Australia is not considered to have a permanent place of abode outside Australia if the spouse has taken timely and appropriate steps to migrate to Australia.
Your spouse took steps to migrate to Australia in late 2010 and therefore is considered to be a resident of Australia from that date.
You are entitled to claim a dependant spouse tax offset from the date your spouse applied for a visa until their arrival in Australia as this is the period that you satisfied all the conditions set out in section 159J of ITAA 1936.