Here comes the bride…..and some changes to your tax return
Are you and your significant other planning a wedding? While it’s not usually high on the wedding day to-do list, it is worthwhile after the honeymoon is over to get your tax affairs in order now you’re officially hitched.
Continue for information on:
- Joint bank accounts
- Home ownership
- Filling in your return as a spouse
JOINT BANK ACCOUNTS
Will you be setting up a joint bank account to start your life together? The ATO will typically assume a 50/50 split of the interest earned on the joint bank account and add it to each partner’s taxable income accordingly. If, however, you can prove only one partner really benefited from the account, you may be able to assign interest income to them.
What if you both own a home or apartment coming into the relationship? Depending on the living conditions you have, you may be able to apply for the main residence to become the family home, which is then exempted from capital gains tax. This really depends on where you are both living, so it’s best to consult your local ITP tax accountant for details.
Whilst we know it might not be as exciting as your honeymoon, a quick trip to your local ITP tax office can help get your finances in order as a couple. We might even let you off the hook for not inviting us to the wedding.
FILLING YOUR TAX RETURN AS A SPOUSE
Because you’re legally identified as a spouse there are a couple of changes you’ll need to make when you next file your taxes. There’s the easy stuff, like ticking the box that says you have a spouse and updating your details if you’ve changed your name. Unlike some countries where you can lodge a ‘family return’, in Australia each partner is required lodge an individual tax return.
Both partners in the couple need to alert the ATO when they’ve become a spouse and what their income and assets are. This will help the ATO calculate your eligibility for various entitlements and offsets. This includes the Superannuation Spouse contribution and the Private Health Insurance rebate. You’ll still be able to consider any assets brought into the marriage, like shares for example, as individual assets.