In 2008, the government passed legislation to ensure that same-sex couples and families are
treated the same way as other couples and families for income tax and superannuation purposes.
The legislation expanded key terms such as ‘spouse‘ and ‘child‘ to recognise the relationships of same-sex couples and their children.
These changes may affect the information that you need to provide in your income tax return.
| The income tax changes apply from 1 July 2009 onwards. They do not apply to previous years. The superannuation changes came into effect from 1 July 2008. |
The income tax changes mean that you may now be eligible for the following tax offsets:
- Spouse (without dependent child or student), child-housekeeper or housekeeper.
- Parent, spouse’s parent or invalid relative.
- 20% tax offset on net medical expenses over the threshold amount.
If you have a spouse, this may affect your claim for:
- senior Australians (includes age pensioners, service pensioners and self-funded retirees) tax offset, or
- pensioner tax offset.
It may also affect your claim for a zone or overseas forces tax offset.
You still need to meet other criteria to be eligible for these tax offsets.
These changes may also affect your access to:
If your relationship ends, the changes also affect your access to:
Recognition of a same-sex relationship may also affect:
New definitions
What is the definition of a spouse?
Your spouse includes another person (whether of the same or opposite sex):
- who you were in a relationship with that was registered under a prescribed State or Territory law, or
- who, although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.
What is the definition of a child?
Each of the following is also the child of an individual:
- the individual’s adopted child, stepchild or ex-nuptial chid
- a child of the individual’s spouse
- someone who is a child of the individual within the meaning of the Family Law Act 1975.
Common questions
What relationships are impacted?
Both de facto relationships and registered relationships are now recognised.
A de facto relationship is where two people who are not legally married live together on a genuine domestic basis in a relationship as a couple.
A registered relationship is one that is registered under certain prescribed state and territory laws that provide for registration of relationships. Currently, Victoria, Tasmania and the Australian Capital Territory provide for the registration of a relationship.
When were the changes implemented?
The changes to recognise same-sex relationships took effect for superannuation purposes on 1 July 2008 and for Income tax purposes from 1 July 2009.
Why does the ATO need to ask my gender?
There are times when we will ask you to nominate:
- your salutation (Miss, Mrs, Ms, Mr or other)
- your gender (male or female)
- your spouse’s gender (male or female).
This may be to:
- establish proof of your identity
- consent to repay your spouse’s Family Assistance Office (FAO) debt
- transfer any unused portion of the senior Australian tax offset (SATO) to your spouse
- transfer any unused portion of the pensioner tax offset (PTO) to your spouse.
Currently the age pension age is different for males and females and one of the conditions of entitlement to receive a transfer of any unused portion of SATO or PTO is to be the age pension age for your gender.
How should I complete my tax return if I am still married but now in a genuine same-sex de facto relationship?
Generally, you should complete your income tax return based on your domestic situation on 30 June of the relevant financial year.
Example:
- Adam is married to Tanya but separated from Tanya to move in with David. Since that time Adam and David have been living together in a genuine domestic relationship as a couple. Prior to separating from Tanya, Adam completed his income tax return recognising Tanya as his spouse while David completed his income tax return as a single person. From 1 July 2009, both Adam and David will complete their income tax returns recognising each other as a spouse.
What happens if our same-sex relationship ends?
From 1 July 2009, a person who was in a same-sex relationship may be recognised as a ‘former spouse’ under a ‘family law obligation‘. This means that you may be eligible for:
- capital gain tax (CGT) rollover relief if the family home was transferred to you as part of a relationship breakdown settlement, and
- a share of the first home saver account contributions made by you while you were living together in a genuine domestic relationship as a couple.
Example:
- Richard and Damian have lived together as a couple in Canberra since March 2006. In 2007 they purchased their joint home and in 2009, when the Australian Capital Territory Government passed legislation, allowing same-sex couples to register their relationship, they were among the first to formally recognise their union. Richard and Damian separated during the financial year 2009-10 (after 1 July 2009). Damian wished to remain in the home and negotiated with Richard to transfer his share as part of the relationship breakdown settlement.
As the transfer date of the property from Richard to Damian (the transferee spouse) was after 1 July 2009, Damian will be able to apply for CGT rollover relief.
Warren Kruger is an Australian Tax Specialist and Advisor. For a FREE Report “7 Essential Strategies to Reduce Your Taxation NOW!”,enter your name and email address in the Opt In Box located on the top right hand side of this article.
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