Can the ATO take money from a joint account?
Short answer
Usually not, if only one account holder owes the debt. A garnishee notice reaches money the bank owes to you. In a genuine joint account the bank owes the balance to both of you, and the ATO's practice is generally not to garnishee it for one holder's debt. It can take from a joint account when both holders owe, or when the account is joint in name only.
Why joint accounts are usually left alone
A bank garnishee works by telling the bank to pay the ATO money it holds for the tax debtor. With a joint account the bank holds the money for two people together, and it cannot tell which dollars are whose. Taking the balance would mean taking the other person's money for a debt they do not owe, so the ATO's usual practice is to leave a genuine joint account out of a notice issued against one holder.
That is a practice, not a promise. The ATO does not publish a hard rule on joint accounts, and a bank acting on a broadly worded notice can sometimes apply it first and sort it out later. If that happens, contact the ATO straight away with evidence of who the money belongs to.
When a joint account can be taken
- Both holders owe the debt. Partners in a business partnership, or two directors who have each received a director penalty notice for the same company debt, can both be named. Then the joint account is fair game.
- The account is joint in name only. If your wages are the only money going in and you are the only one using it, the ATO can argue the balance is really yours.
- You moved money there after the trouble started. Shifting savings into a spouse's or joint account once a debt is overdue does not protect the money and damages your credibility. The same rule applies to property: transfers made to defeat creditors can be unwound.
Bankruptcy is different again. A trustee can claim your share of a joint account, usually half unless you can show otherwise.
Protecting a shared account from a tax debt
Free, confidential help to get the debt under control before it touches the household.
What to do if you share an account with someone who owes
If your partner has an overdue tax debt and you share an account, the sensible steps are practical rather than defensive.
- Keep clear records of whose money goes in. Payslips and transfers matter if you ever need to show the balance is not the debtor's.
- Do not start moving large sums around now. It looks like exactly what it is.
- Deal with the debt. A payment plan that is kept stops garnishee action on that debt, which protects the joint account better than any restructuring.
You are not personally liable for a spouse's tax debt just because you are married or share an account. Our page on whether a spouse is liable for tax debt covers where the line sits.
What to do next
- Work out whether the debt is owed by one of you or both, for example a partnership debt or two director penalty notices.
- Gather payslips and transfer records showing whose money is in the joint account, in case you need to ask the ATO to release funds.
- Get the debtor's payment plan or hardship options moving, because that is what actually protects the shared account.
Related questions
Can the ATO garnishee my spouse's bank account for my tax debt?
No. A garnishee notice can only reach money held for the person who owes the debt. An account in your spouse's sole name is not reachable for your debt, unless money you moved there is later clawed back as a transfer made to defeat creditors.
What if the ATO has already taken money from our joint account?
Call the ATO on 13 11 42 as soon as you notice, explain that the account is joint and the other holder does not owe the debt, and provide evidence of whose money it is. The ATO can vary the notice and refund money that should not have been taken. Do it in writing as well as by phone.
Protecting a shared account from a tax debt
Free, confidential help to get the debt under control before it touches the household.
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