Issue
Is the taxpayer entitled to claim a dependant tax offset under section 159J of the Income Tax Assessment Act 1936 (ITAA 1936) for maintaining a parent who lives overseas?
Decision
No. The taxpayer is not entitled to claim a dependant tax offset under section 159J of the ITAA 1936 for maintaining a parent who lives overseas.
Facts
The taxpayer is a resident of Australia for income tax purposes. The taxpayer's parent lives overseas and is a non resident of Australia for taxation purposes. The parent is totally financially dependent on the taxpayer.
Reasons for Decision
Subsection 159J(1) of the ITAA 1936 provides that a taxpayer is entitled to a tax offset where, during the income year, they contributed to the maintenance of a dependant who is a resident of Australia.
Although the parent of the taxpayer may be a dependant for the purposes of the dependant tax offset (subsection 159(2) of the ITAA 1936), the parent lives overseas and is not a resident of Australia. Therefore the taxpayer is not entitled to a dependant tax offset.