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Edited version of your private ruling
Authorisation Number: 1012064318689
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Ruling
Subject: Dependent spouse tax offset
Question
Is the tax free grant that your spouse receives, included in the spouse adjusted taxable income (ATI) for the purposes of the spouse tax offset?
Answer: No.
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2010
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.
Your spouse received a tax free grant.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159J,
Income Tax Assessment Act 1936 Subsection 159J(6) and
A New Tax System (Family Assistance) Act 1999 Schedule 3.
Reasons for decision
Detailed reasoning
Section 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 dependent who is a resident of Australia.
Subsection 159J(6) of the ITAA 1936 states that adjusted taxable income has the same meaning as in the A New Tax System (Family Assistance) Act 1999, except that, for the purposes of this section, clauses 3 and 3A of Schedule 3 to that Act are taken not to have been enacted.
For the purposes of this Act, an individual's adjusted taxable income for a particular year is the sum of the following amounts:
· the individual's taxable income for that year
· the individual's adjusted fringe benefits total for that year
· the individual's target foreign income for that year
· the individual's total net investment loss (within the meaning of the Income Tax Assessment Act 1997 (ITAA 1997)) for that year
· the individual's tax free pension or benefit for that year
· the individual's reportable superannuation contributions (within the meaning of the ITAA 1997) for that year,
· less the amount of the individual's deductible child maintenance expenditure for that year.
In your case, your spouse is in receipt of a tax free grant and is not included in the type of income listed above. Therefore the amount is not included to calculate your spouse's adjusted taxable income.
To work out the spouse tax offset you can claim, refer to page 55 (adjusted taxable income) and page 57 (dependent spouse tax offset worksheet) of Tax Pack 2011.