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Edited version of your written advice
Authorisation Number: 1051494626626
Date of advice: 20 March 2019
Ruling
Subject: Expenses – other – spouse support payments
Question
Are you entitled to a deduction for support payments paid to your ex-spouse?
Answer
No.
This ruling applies for the following periods:
Year ending 30 June 2018
Year ending 30 June 2019
Year ending 30 June 2020
Year ending 30 June 2021
The scheme commences on:
1 July 2017
Relevant facts and circumstances
You are an overseas citizen, paying income taxes in that country.
You receive a pension provided by an intergovernmental organisation.
You pay court-sanctioned spouse support to your ex-spouse who lives in overseas.
You moved to Australia for the 20xx/20xx 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 or outgoings to the extent that they are incurred in gaining or producing assessable income, or are necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. However, no deduction is allowed where the losses or outgoings are of a capital, private or domestic nature or another provision prevents the taxpayer from deducting it.
The terms ‘private’ and ‘domestic’ are not defined in ITAA 1997 and therefore take their ordinary meaning. Private expenditure is expenditure that relates to an individual personally (for example, food, clothing and travel costs). Domestic expenditure is a form of private expenditure which relates to a person's household or family arrangements (for example, rent on a person's home).
You are required to pay your ex-spouse support payments under a court-sanctioned agreement. These payments were not incurred in the course of earning your assessable income. Furthermore, they are considered to be an expense of a private or domestic nature.
Accordingly, you are not entitled to a deduction for alimony payments you make to your former spouse under section 8-1 of the ITAA 1997.