Spring is upon us and that means “wedding season” is with us too. Across Australia, thousands of couples will be looking forward to their forthcoming nuptials and the chances are few of them will have given any thought to the potentially important tax consequences of their new married status.
The good news is we’ve done the hard work. Here’s our guide to all you need to know about marriage and tax.
If your guests choose to make gifts to a charity of your choice as a wedding gift, they can claim a tax deduction for the gift provided it’s to a charity registered as a Deductible Gift Recipient. Read more about deductible gift recipients.
It is not unusual for each half of a couple to own to own their own home before they married. Normally, you can sell your main residence without CGT. However, spouses are only entitled to one main residence exemption for capital gains tax (CGT) purposes between them. If both members of a couple each own a main residence they must either:
Provided the homes meet the requirements for the main residence exemption, they will both be wholly exempt from CGT for the period prior to the couple being treated as spouses. However, from the time the couple get married, they can only have one exemption, although this may be divided between the two dwellings.
Susan bought a house in 2004. She lived in it until she married Roger in 2015 at which point they moved into his house, which he had owned since 2010. Roger’s house became their main residence for CGT purposes. If she chooses to sell her house, Mary will be subject to CGT on her house for any growth in value from 2015 but she will not have to pay CGT on any capital growth in the period before she married Roger.
The definition of spouse has been extended so that both de facto relationships and registered relationships are now recognised. Your 'spouse' is another person (whether of the same sex or opposite sex) who:
That means that people living in same-sex relationships are now treated in the same way as heterosexual couples for tax purposes. They now fall under the same rules in areas such as these:
Our H&R Block accountants are now working online. Book an appointment with an expert.