Private ruling: Adjusted taxable income
Published: September 2012
Ruling period: Year ended 30 June 2010 | Year ended 30 June 2011
Date scheme commenced: 1 July 2009

Ruling: Q1: Are you required to include your spouse's superannuation pension when calculating their ATI for the purposes of the dependant spouse tax offset? | A1: No.

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 superannuation pension. Your spouse is over 60 years of age.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 159J, and | Income Tax Assessment Act 1936 subsection 159J(4).

Reasons for decision: Summary: Section 159J of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a taxpayer may be entitled to a tax offset where, during the year of income, they contribute to the maintenance of a dependant who is a resident of Australia. Where a person is entitled to a dependent spouse tax offset, that tax offset may be reduced in part or in full by the dependant's ATI. Subsection 159J(4) of the ITAA 1936 provides for the amount of the tax offset otherwise allowable to be reduced by $1 for every $4 by which the ATI derived by the dependant in the year of income exceeds $282. An individual's ATI for a particular year is the sum of the following amounts: · the individual's taxable income, · the individual's adjusted fringe benefits amount, · the individual's tax-free government pensions or benefits; however do not include any superannuation benefits (income streams or lump sums), · the individual's target foreign income (includes any income earned from overseas that is not already included in your taxable income or received in the form of a fringe benefit), · reportable super contributions (includes both reportable employer super contributions and deductible personal super contributions), · total net investment loss (includes both net financial investment loss and net rental property loss), · Less the individual's deductible child maintenance expenditure (child support you paid). A taxpayer will be eligible to claim the dependent spouse tax offset if their spouse was born before 1 July 1971, their ATI for the 2011-12 financial year is below $150,000 and their spouse's ATI is less than $9,702. In your case, your spouse received a superannuation pension. This type of payment is not included in the list above; as such you are not required to include this amount in your spouse's adjusted taxable income.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.