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Can the taxpayer, a parent entitled to the first child tax offset (baby bonus), transfer the baby bonus to their same-sex partner under section 61-385 of the Income Tax Assessment Act 1997 ('ITAA 1997')?

No. The taxpayer, a parent entitled to the baby bonus, cannot transfer the baby bonus to their same-sex partner under section 61-385 of the ITAA 1997.

The taxpayer is the parent of a child in respect of whom they are entitled to a baby bonus.

The taxpayer is a member of a same-sex relationship.

A taxpayer's primary entitlement to the baby bonus is established under section 61-355 of the ITAA 1997.

Section 61-385 of the ITAA 1997 allows the entitlement to the baby bonus to be transferred from the person who is primarily entitled to the baby bonus to their spouse in certain circumstances.

For income tax purposes, the term 'spouse' has the meaning given to it by the definition in section 995-1 of the ITAA 1997. That definition states that the: ' spouse of a person includes a person who, although not legally married to the person, lives with the person on a genuine domestic basis as the person's husband or wife.'

There is no requirement in the definition that there be a legal marriage according to the laws of Australia or another nation. However the definition states that the person must live with the person on a genuine domestic basis as the person's 'husband' or 'wife'. The terms 'husband' and 'wife' is not defined in tax legislation, therefore the ordinary meaning of the terms are used.

The ordinary meaning of 'husband and wife' was examined in Gregory Brown v. Commissioner for Superannuation (1995) 38 ALD 344 at page 349; (1995) 21 AAR 378 at page 383 where the Administrative Appeals Tribunal stated: 'For whatever other changes the words "husband" and "wife" may have undergone over the years they retain, in our opinion, their complementary gender connotations. A "wife" is the female partner of a marital relationship and a "husband" the male partner.'

The relationship between the taxpayer and the taxpayer's partner does not fall within the ordinary meaning of 'husband and wife' because the taxpayer's partner is of the same sex as the taxpayer. Therefore the taxpayer's partner does not satisfy the definition of a 'spouse' under section 995-1 of the ITAA 1997 as the taxpayer and the taxpayer's partner are not living on a genuine domestic basis as 'husband and wife'.

As the taxpayer's partner is not their spouse, the taxpayer is unable to transfer their entitlement to the baby bonus to their partner under section 61-385 of the ITAA 1997.