Private ruling: Dependant Spouse Offset
Published: December 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 01 July 2010

Ruling: Q1: Are you entitled to a spouse tax offset for your spouse who is not yet living in Australia? | A1: No

Relevant facts and circumstances: You came to Australia in 2007, and you currently live and work in Australia. You are earning your income in Australia and paying tax on the income. You were married, and your family is living overseas. Your family is living at your parents' house. You financially support your family who have no other income. You received permanent residency in Australia in 2010. Your family have applied for and received their passports in 2009. Your family wish to migrate to Australia and will make application for this as soon as possible.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 6 (1) | Income Tax Assessment Act 1936 section 159J | Income Tax Assessment Act 1936 subsection 159J (3A)

Reasons for decision: Summary: 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 spouse who is a 'resident of Australia". A 'resident of Australia' is defined in subsection 6(1) of the ITAA 1936. Subsection 159J(3A) of the ITAA 1936 provides that, in applying the definition of resident in subsection 6(1) of the ITAA 1936, for the purposes of the dependant spouse tax offset, the dependant spouse of a taxpayer will be taken to have the same domicile as the taxpayer. The taxpayer's spouse is therefore, deemed to have a domicile in Australia for the purposes of the definition of resident in subsection 6(1) of the ITAA 1936. Subsection 6(1) of the ITAA 1936 defines a resident to include a person whose domicile is in Australia, unless the Commissioner is satisfied that their permanent place of abode is outside Australia. The leading case on permanent place of abode is Applegate v. FC of T 79 ATC 4307; (1979) 9 ATR 899. The Federal Court stated that in respect of the definition of 'resident', a permanent place of abode does not have to be everlasting or forever but it is rather used in contrast to temporary or transitory. Taxation Ruling IT 2650 also considers residency and permanent place of abode outside Australia. Paragraph 12 of IT 2650 states that 'place of abode' refers to a person's residence, where one lives with one's family and sleeps at night. In essence, a person's 'place of abode' is that person's dwelling place or the physical surroundings in which a person lives. Your spouse and children reside at your parents' house overseas and you remit money to your family to maintain them. In your case, your spouse and children are currently living overseas and their current 'place of abode' is overseas. Their present arrangement is not temporary or transitory and will be ongoing until they are able to migrate to Australia. A spouse who is waiting to migrate to Australia is not considered to have a permanent place of abode outside Australia if the spouse has taken timely and appropriate steps to migrate to Australia. In your case, you moved to Australia and were granted permanent residency in 2010. Your spouse and children received their passports in 2009 and are yet to apply to migrate to Australia. It would not be considered that your spouse has taken steps to migrate to Australia in a timely manner and would, therefore be considered to have a permanent place of abode outside of Australia. While we accept that you financially support your dependant family, the Commissioner considers that your spouse's place of abode is overseas and she was not a resident of Australia for taxation purposes. As such, you are not entitled to a spouse tax offset.

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