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Edited version of your private ruling
Authorisation Number: 1012043891676
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Ruling
Subject: maintenance payments to ex spouse
Question
Are you entitled to a deduction for maintenance payments paid to your ex spouse?
Answer
No.
This ruling applies for the following period:
Year ended 30 June 2011
The scheme commences on:
1 July 2010
Relevant facts and circumstances
You separated from your spouse.
Due to legal processes, the Family Law court order was not effected until some time after your separation.
You made an agreement with your spouse to make maintenance payments to her until the court order issued.
You made maintenance payments to your ex spouse for a period during the 2010-11 financial year.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1.
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
In your case you made maintenance payments to your ex spouse during the 2010-11 financial year. This expense was not incurred in relation to your income earning activities and these payments are considered private and domestic in nature. Therefore, you are not entitled to a deduction for maintenance payments under section 8-1 of the ITAA 1997.
Additional Information
A private binding ruling applies the law to your specific set of circumstances. There is no discretion available to the Commissioner to allow the maintenance payments you incurred to be a deductible expense.