Payment of Spouse

From: Alan Hill

Hi all,

I currently pay my wife to do the books and manage our couple of IP's for which she declares as income and pays tax.

I saw someone mention in the forum recently that the ATO was reviewing this and it may be cut out. Would think many spouses would be furious about this as it amounts to unpaid labour.....I'm sure many women especially have a pretty strong point of view on that already!

I checked with my accountant and he said it wouldn't be worth me doing this anymore as she'd need an ABN or I would have to pay her Super etc etc. Has anyone heard anymore about this?

I could understand an objection from the ATO if my wife wasn't declaring this as income and paying tax but I can't see the problem under these circumstances.

I'd appreciate any feedback. Thank you.
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Reply: 1
From: Dale Gatherum-Goss


It is issues like this that always make me angry and frustrated with our tax system.

The tax law is not a fair law and never will be. It is designed by beaurocrats who do not fully understand the real world and the implications of their laws. In fact, this is proven over and over again when we head off to the highest court in the land for direction and 3 judges vote one way and 2 the other. It's a farce!

Sorry, Alan, I got carried away there!

The answer is that the tax office are likely to attack your situation if the look closely enough to see it. This is because although your wife declares the income it is quite likely that she does so at a ;lower rate of tax than you pay and there is the reason why the tax office won't be happy.

Having said this, if your wife was to have an ABN and was to keep diary notes and records of the time that she spends on the business of bookkeeping, you will have some chance of getting it through.

It still might not be enough though when you consider some of the other "new" rules that have arrived within the last year or so to do with people working for one client.


I hope that this helps though

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Reply: 1.1
From: James Doherty

If your spouse registers a business and manages the properties for you as the 'business' the tax office i'm sure cannot do a thing .Its just a proper business transaction

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