04 Nov 1010 Wife was not employed by husband - France
The AAT has denied a taxpayer deductions for salary and wages paid to, and superannuation contributions made on behalf of, his wife, on the basis that the outgoings were of a private and domestic nature, and were not paid to or on behalf of the wife in her capacity of an employee of the taxpayer.
The taxpayer unsuccessfully argued that he had entered into an employment relationship with his wife which required her to look after his investment property. The "employment relationship" was suggested and implemented by the taxpayer's accountant. The AAT said, at para 18:
"One does not transform an existing relationship simply by calling it by a different name, or even adopting some of the forms of a different relationship. Language and form is merely an indicator of the nature of the relationship. Language and form will not be decisive if they do not accurately reflect the character of the relationship. One must look to the totality of the relationship when characterising it. In this case, the relationship between the parties continued to be what it had always been: a spousal relationship in which one of the spouses attended to the management of the family’s affairs."
France and FCT  AATA 858 (AAT, McCabe SM, 2 November 2010).