Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
The taxpayer wishes to vary a XXXXXXXXXX court order to remove the requirement to pay spousal support. Will the variation in the court order result in a "commencement day" causing the new child support rules to apply?
Position TAKEN:
No commencement day as long as there is no change in child support amounts and the varied court order clearly states that the original court order remains in effect and that the child support payable is payable under the original order.
Reasons FOR POSITION TAKEN:
Consistent with subsection 56.1(4) of the Act and IT-530.
XXXXXXXXXX 2000-003450
Attention: XXXXXXXXXX
XXXXXXXXXX, 2000
Dear Sirs:
Re: Advance Income Tax Ruling
XXXXXXXXXX
We are replying to your letter of XXXXXXXXXX, wherein you requested an advance income tax ruling on behalf of XXXXXXXXXX with respect to a proposed application to vary the XXXXXXXXXX, Consent Interim Order between XXXXXXXXXX (the "Wife") and XXXXXXXXXX (the "Husband"). We also acknowledge your letter of XXXXXXXXXX.
To the best of your knowledge, and that of the taxpayer involved, none of the issues contained herein is, in an earlier return of the taxpayer or a related person, being considered by a tax services office or taxation centre in connection with a previously filed tax return of the taxpayer or a related person or is under objection by the taxpayer or a related person and is before the courts or, if a judgement has been issued, the time limit for appeal to a higher court has not expired.
Our understanding of the facts and proposed transaction is as follows:
Statement of Facts
1. The Husband resides in XXXXXXXXXX and is a Canadian resident.
2. The Husband and Wife live separate and apart by reason of breakdown of their marriage, which has been the case since approximately XXXXXXXXXX.
3. Pursuant to a Consent Interim Order dated XXXXXXXXXX (the "Original Order"), the Husband is required to pay spousal support of $XXXXXXXXXX per month and child support of $XXXXXXXXXX per month for each of XXXXXXXXXX children for total support payments of $XXXXXXXXXX per month. The support is to be paid in equal instalments of $XXXXXXXXXX each on the XXXXXXXXXX of each month beginning on XXXXXXXXXX. The support amounts are currently deductible under paragraph 60(b) of the Income Tax Act (the "Act").
Proposed Transaction
4. The Husband proposes to request the XXXXXXXXXX Court of Queen's Bench to vary the Original Order ("Proposed Variation Order") by deleting paragraph (XXXXXXXXXX), which reads:
"XXXXXXXXXX."
amending paragraph (XXXXXXXXXX) to read as follows:
"XXXXXXXXXX."
and amending paragraph (XXXXXXXXXX ) to read as follows:
"XXXXXXXXXX."
The foregoing amendments would not change the child support amounts payable to the Wife by the Husband. They would simply reflect the fact that spousal support is no longer payable.
Purpose of the Proposed Transaction
5. The purpose of the proposed transaction is to remove the requirement to pay spousal support.
Rulings Requested and Given
Provided that the above mentioned facts and proposed transaction are accurate and constitute complete disclosure of all the relevant facts and proposed transaction, and provided that the proposed transaction is completed in the manner described above, subject to the comments below, our rulings are as follows:
A. Provided that the Proposed Variation Order states that the Original Order continues to have legal force and effect, we confirm that the Proposed Variation Order would not, in and by itself, trigger a "commencement day" within the meaning of subsection 56.1(4) of the Act.
B. Subject to the application of subparagraphs (b)(i) and (iii) of the definition of "commencement day" in subsection 56.1(4) of the Act, we confirm that the Husband may continue to deduct the child support payments paid pursuant to the Original Order from his income pursuant to paragraph 60(b) of the Act.
These rulings are given subject to the general limitations and qualifications set forth in Information circular 70-6R3 dated December 30, 1996, issued by Canada Customs and Revenue Agency (the "CCRA"), and are binding on the CCRA provided the proposed transaction is executed on or before XXXXXXXXXX.
These rulings are based on the Act in its present form and do not take into consideration any proposed amendments to the Act.
Yours truly,
XXXXXXXXXX
for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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