Skip to main content

Income Tax Amendment Act 2005

2005 amendments to the Income Tax Act give recognition to civil unions, some de facto relationships and defer the recognition of same sex relationships to Apr 2007.

The amendments to this Act are in two parts. Part 1 came into force on 26 April 2005, and Part 2 takes effect from 1 April 2007.

Most changes in Part 1 give recognition to civil unions, while those in Part 2 extend recognition to de facto relationships. However, where the defined term "spouse" already applied, especially in the family assistance provisions in subpart KD, the amendments preserve the recognition of de facto relationships between a man and a woman. For those provisions, it is only the recognition of same-sex de facto relationships that is deferred until 1 April 2007, to give those couples time to adjust their personal and financial affairs, if necessary.

Although in Part 1 the defined term "de facto relationship" in section OB 1 takes its meaning from the new section 29A of the Interpretation Act 1999, it is limited for the purposes of the Income Tax Act to relationships between a man and a woman. That term and the related "de facto partner" are omitted in Part 2, with effect from 1 April 2007, when they take their full meaning from the Interpretation Act and include same-sex relationships and partners.

Replacement of "spouse" with "spouse or civil union partner"

Amendments to replace "spouse" with "spouse or civil union partner" from 26 April 2005 and to also include "de facto partner" from 1 April 2007 are in sections CB 19 (1), CB 20(1), CD 5(1), CD 14(9), CD 19(1), CD 33 (16), CE 5(2) and (3), the definition of "pension" in CF 1, CW 26, CW 38, CX 15, DB 34, DC 2, DC 3, FF 1, GD 4, KC 4, LD 1, OB 1 (the definition "separated person"), and OD 8.

Replacement of "spouse" with "spouse, civil union partner, or de facto partner" in Part 1

Some amendments in Part 1 include de facto partners as well as civil union partners because they take up the previous definition of spouse that included people in a relationship in the nature of marriage. They are, however, limited to relationships between a man and a woman until 1 April 2007. They are: KC 3, KD 1A, KD 2, KD 2AAA, KD 2AA, KD 2AB, KD 3, KD 3A, KD 4, KD 5, KD 5B, KD 6, KD 7, and OB 1 (replacement paragraph (b) of the definition "eligible period", the definition "full-time earner", and the definition "fully employed person").

Replacement of "matrimonial agreement" with "relationship agreement"

Amendments to replace "matrimonial agreement" with "relationship agreement", all in Part 1, are to sections CE 3(4), CZ 6, DZ 1, EE 34, EE 38, EW 10, EZ 11, EZ 20, EZ 42, FB 4, FC 5, FF 1, FF 2, FF 3, FF 4, FF 5, FF 6, FF 7, FF 8, FF 9, FF 10, FF 11, FF 12, FF 13, FF 14, FF 15, FF 16, FF 18, FF 19, GD 1, and OB 1 (the definitions "date of transfer", "income year of transfer", "transferee", "transferor", and "type").

Inserting references to civil unions and de facto relationships

Amendments to insert a reference to civil union where there are existing references to marriage are in DC 2, DC 3, and OB 3. The provisions are further amended from 1 April 2007 to insert references to de facto relationships. However, the reference to "marriage" in section HH 3F(3) is replaced with "marriage or partnership" because the provision already recognises de facto relationships and is being extended to include civil unions. The meaning of "marriage or partnership" is clarified in new paragraph HH 3F(4)(b).

Section CS 4 is replaced in Part 1 to include reference to civil union and the new section 2AB(2) of the Property (Relationships) Act 1976.

Unmarried persons

In the definition of "child" in section OB 1, the words "an unmarried person who" are replaced in Part 1 with "a person who is not in a marriage, civil union, or de facto relationship between a man and a woman, and who". The words "between a man and a woman" are omitted in Part 2, when the term "de facto relationship" takes its full meaning from the Interpretation Act 1999 on 1 April 2007.

Housekeeper rebate

The definitions in section KC 4 are instrumental in determining entitlement to the tax rebate. The limitation to people who are married has had a two-way effect, with the definition of "communal home" creating a disadvantage for married persons, the definition of "housekeeper" creating a disadvantage for de facto partners, and the definition of "separated person" creating a disadvantage for those who have been in a de facto relationship. Civil union partners are to be included through the amendments in Part 1, while de facto partners are included in the Part 2 amendments.

Other definitions in section OB 1

There is a new definition of "civil union partner" to make it clear that when the term is used in the specified provisions it does not include a separated person. The definition of "spouse" is also replaced to have the same effect.

The definition "matrimonial agreement" is omitted in Part 1 and the new definition "relationship agreement" is inserted with reference to relevant provisions in the Property (Relationships) Act 1976.

The definition "relative" is amended to include references to civil unions in Part 1 and de facto relationships in Part 2. The most significant effect of the amendment is to broaden the scope of the associated persons" rules.