Private ruling: Spouse tax offset
Published: September 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a spouse tax offset? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159J

Reasons for decision: Summary: Spouse tax offset Section 159J of the Income Tax Assessment Act 1936 (ITAA 1936) outlines the requirements and conditions necessary for a person to be eligible to claim a spouse tax offset. Under the amended subsection 159J(1C) of the ITAA 1936, a taxpayer is not entitled to a tax offset in respect of a dependent spouse if the dependant was born on or after 1 July 1952. As your spouse was born before this date, this requirement is satisfied. The maximum dependent spouse tax offset available to eligible taxpayers for 2013-14 is $2,471. However, where your spouse derives adjusted taxable income, the tax offset otherwise allowable is reduced by $1 for every complete $4 by which the spouse's adjusted taxable income exceeds $282. The 2013-14 spouse tax offset cuts out when the spouse's adjusted taxable income is $10,166 or more. For the tax offset purposes, adjusted taxable income has the same meaning as in A New Tax System (Family Assistance) Act 1999 , and disregarding clauses 3 and 3A of Sch 3 to that Act. Adjusted taxable income is the sum of the following amounts: • taxable income, • reportable superannuation contributions, • total net investment loss, • adjusted fringe benefits, • certain tax free government pensions or benefits • target foreign income, less the amount of the deductible child maintenance expenditure for that year. Tax free pension or benefit is further defined and lists various pensions and payments paid under the Social Security Act 1991, Veterans Entitlements Act 1986 and Military Rehabilitation and Compensation Act 2004 . Your spouse's allocated pension is not a tax free pension or benefit listed and is therefore not included in calculating their adjusted taxable income. As you meet all the other requirements in relation to claiming a spouse tax offset, you are entitled to include the relevant spouse tax offset amount on your 2014 tax return.

Relevant facts: You and your spouse are Australian residents. | Your adjusted taxable income is less than $150,000. | You maintained your spouse. | You do not have any dependent children. | Neither you nor your spouse received parental leave pay. | Your spouse received some bank interest. | Your spouse also received an income stream from an allocated pension. This pension is tax free. | Your spouse was born before 1 July 1952.