Question:
Marriage split: Husband’s income details go to ATO
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
The full bench of the Family Court has ordered that documents sought in an audit of the husband’s tax affairs for the income years from 1991 to 2010 be handed over to the Tax Office, where the couple had a settlement matter before the Court. The decision was made in April this year and the full bench overturned an earlier 2013 decision made by a single Family Court judge who originally said the ATO could not use the Court documents.
Mr Darling and his wife had a settlement matter before the Family Court when the Tax Office commenced the audit in June 2009. Later that year, the Tax Office asked the Court if they could use affidavits made by the husband and wife, financial statements, subpoenas and other documents including the final orders sought in the settlement.
At the end of the 2009 calendar year, the couple asked the Court to dismiss their settlement, shortly after the ATO request for the documents.
In 2013, the single judge refused the Tax Office request for the documents stating that the Tax Office had an obligation under common law not to use the documents for anything outside the court matter and that the Tax Office reasons for requesting the documents were imprecise, not supported by any evidence and were without any explanation of the “public interest” in releasing the documents.
Earlier this year, the full bench disagreed with the single judge and allowed the Tax Office to use pages from the husband’s affidavit and other documents to assess tax, penalties and interest. The reasons for now allowing access were: to advance the “public interest”; that it was a targeted rather than a random audit; many of the marital assets were outside of Australia; the history of acquiring assets was important to assessing income; that the documents could not go from the Tax Office into the public arena; and the only inconvenience to the husband would occur if he was not meeting his tax obligations.
Also, the full bench ruling indicates the Family Court can and does regularly refer tax evasion matters to the authorities for investigation and has done so since 1984.
This case appears to be a significant precedent allowing the Tax Office to gain access to Family Court documents for the purposes of audit and assessment of tax.
FCT v. Darling Anor [2014] FamCAFC 59
FCT v. Darling Anor [2013] FamCA 118
WTB 2014/643
