Dependant spouse tax offset - taxpayer not resident for family tax benefit purposes

Is a dependant spouse tax offset allowable under section 159J of the Income Tax Assessment Act 1936 (ITAA 1936) for a taxpayer who is not eligible for family tax benefit under the A New Tax System (Family Assistance) Act 1999 (ANTS (FA) Act 1999) due to residency requirements?

Yes. A dependant spouse tax offset is allowable under section 159J of the ITAA 1936 for a taxpayer who is not eligible for family tax benefit under the ANTS (FA) Act 1999 due to residency requirements.

The taxpayer and the taxpayer's dependant spouse are residents of Australia for taxation purposes.

The taxpayer and the taxpayer's dependant spouse are not entitled to family tax benefits as they are not residents of Australia for social security purposes.

The taxpayer's dependant spouse has no separate net income.

Section 159H of the ITAA 1936 provides that only resident taxpayers are entitled to concessional tax offsets.

Section 159J of the ITAA 1936 allows a tax offset where a taxpayer contributes to the maintenance of a dependant who is a resident. Subsection 159J(2) of the ITAA 1936 specifies that a dependant includes a taxpayer's spouse.

The definition of resident for the purposes of section 159H and 159J of the ITAA 1936 is contained in subsection 6(1) of the ITAA 1936.

The taxpayer and the taxpayer's spouse are residents in accordance with subsection 6(1) of the ITAA 1936 and therefore satisfy the residency requirements for a dependant spouse tax offset.

Subsection 159J(1AA) of the ITAA 1936 excludes taxpayers from receiving a tax offset for a dependant spouse if the taxpayer, or the taxpayer's spouse was eligible for family tax benefit at the Part B rate within the meaning of the ANTS (FA) Act 1999.

Section 22 of the ANTS (FA) Act 1999 provides that an individual must be an Australian resident in order to be eligible for the family tax benefit. Section 3 of the ANTS (FA) Act 1999 contains the definition of 'Australian resident' which provides that it has the same meaning as in the Social Security Act (SSA 1991).

Neither the taxpayer nor the taxpayer's spouse are residents in accordance with section 7 of the SSA 1991 and therefore they are not eligible for the family tax benefit at the Part B rate under the ANTS (FA) Act 1999.

Accordingly the taxpayer is eligible for the dependant spouse tax offset under section 159J of the ITAA 1936.