ATO Interpretative Decision
ATO ID 2003/405 (Withdrawn)
Dependant spouse tax offset: spouse living overseas
FOI status: may be released
||This ATO ID is withdrawn because it contains a view in respect of a provision of the Income Tax Assessment Act 1936 that does not apply after the 2013-2014 income year. Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of decisions for income years up to, and including, the 2013-2014 income year.
||This document has changed over time. View its history.
Status of this decision: Decision withdrawn 16 June 2017.
|CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.|
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Is the taxpayer entitled to a dependant tax offset under section 159J of the Income Tax Assessment Act 1936 (ITAA 1936) in respect of a spouse they married while overseas, but who is not yet living in Australia?
Yes. The taxpayer is entitled to a dependant tax offset under section 159J of the ITAA 1936 in respect of a spouse the taxpayer married while overseas but who is not yet living in Australia.
The taxpayer came to Australia thirty years ago and is a resident for tax purposes.
Three years ago the taxpayer returned to their country of birth and married while there. The taxpayer's spouse did not accompany the taxpayer when the taxpayer returned to Australia. The spouse has now applied to immigrate to Australia. The application has not yet been finalised.
The taxpayer maintains their spouse by sending them money.
Reasons for Decision
Subsection 159J(1) of the 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' or 'resident of Australia' is defined in subsection 6(1) of the ITAA 1936, and includes a person who resides in Australia, or whose domicile is in Australia, unless the Commissioner is satisfied that the person's permanent place of abode is outside Australia.
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 when the taxpayer has a domicile in Australia.
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, and will be considered a resident of Australia unless the Commissioner is satisfied that their permanent place of abode is outside Australia.
The leading case on permanent place of abode is Federal Commissioner of Taxation v. Applegate  FCA 66; 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 Income tax: residency - permanent place of abode outside Australia (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.
Where a taxpayer marries while overseas, the spouse 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.
While the taxpayer's spouse is currently living overseas and therefore has a current 'place of abode' overseas, this is only a temporary arrangement. The spouse intends to join the taxpayer in Australia when their immigration application has been approved. As their application has been made in a timely and appropriate manner, the Commissioner accepts that the taxpayer's spouse does not have a permanent place of abode outside of Australia.
As the taxpayer's spouse is deemed have a domicile in Australia and does not have a permanent place of abode outside of Australia, the spouse is a resident as defined in subsection 6(1) of the ITAA 1936. Therefore, as the taxpayer has contributed to the maintenance of a resident spouse, the taxpayer is entitled to a dependant tax offset under section 159J of the ITAA 1936, providing the other requirements of the section are satisfied.
|Date of amendment
|27 June 2014
||Reasons for Decision
||Adjusted wording to better reflect the legislation and relevant public ruling, and to improve clarity
||Related ATO Interpretative Decisions
||Removed reference to ATO ID 2001/423 as the ATO ID has been withdrawn
Date of decision: 1 May 2003
|Year of income:||Year ended 30 June 2003|
Income Tax Assessment Act 1936
Applegate v. Federal Commissioner of Taxation
 FCA 66
79 ATC 4307
(1979) 9 ATR 899
Related Public Rulings (including Determinations)
Taxation Ruling IT 2650
Non resident individuals
Siebel/TDMS reference number: 3572676, 1-5JEQ3RT; 1-BPD2PA6
Business line: Small Business/Individual Taxpayers
Date of publication: 30 May 2003