Same sex, different tax

A controversial tax ruling against a same-sex couple has sparked new calls for the federal government to amend laws concerning the definition of same-sex relationships.

In the ruling, two women who ended their 11-year relationship were not covered by the same tax rulings as heterosexual couples concerning capital gains tax when it came to dividing assets.

Instead of being granted rollover relief, which is granted to opposite sex couples, the women faced a capital gains tax bill for $20,000 because their relationship could not be defined as spousal under current law.

After the end of their relationship, the couple divided their assets, with one woman taking the family home, while the other accepted their investment property.

But when the women tried to transfer the ownership of the investment property, they found themselves with the $20,000 tax bill.

The Administrative Appeals Tribunal, a federal court, found that to qualify for capital gains tax relief under the tax law, a spouse must be defined as a male and female couple.

The judge declared that while 1990 changes in the tax law meant de facto couples were defined as spouses, the changes did not include persons of the same sex.

Andrea Wilson, the lawyer for the two women, said they were now considering appealing against the decision. It’s a discriminatory decision, she told the Herald Sun. It does favour heterosexual couples on the breakdown of relationships.

Other laws that currently discriminate against same-sex couples include those dealing with superannuation concessions, veterans’ entitlements, workers compensation and judicial pensions.

But David Scamell of the Gay and Lesbian Rights Lobby said the case was a troubling first for same-sex couples.

This is a precedent-setting case, Scamell said. There have been other cases that have dealt with same-sex relationships in terms of matters like private health insurance, but this is the first one I can recall in regards to capital gains tax.

Really, there is no basis on which the federal government should knock this back. If the government wanted to reverse the decision, it could easily have changed the relevant taxation legislation to recognise same-sex relationships as spousal relationships to gain tax relief.

They obviously don’t want to go into that because the policy they support is to not recognise same-sex relationships as spousal relationships.