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.
March 28, 2001
XXXXXXXXXX
Dear XXXXXXXXXX:
Mr. Rob Wright, Commissioner of the Canada Customs and Revenue Agency (CCRA), has asked me to respond to your correspondence of January 16, 2001, concerning life insurance premiums paid pursuant to a separation agreement.
I understand that under your separation agreement, you must maintain a life insurance policy on your life with your spouse named as beneficiary of the policy. You enquire whether the premiums you pay under this policy qualify for deduction as support payments.
Under the Income Tax Act, one of the requirements for a spousal support amount to be deductible is that it must be payable to the spouse or former spouse who has discretion as to the use of the amount. In some instances, payments made to a third party may qualify as support amounts; however, the spouse or former spouse must still have or be deemed to have, among other requirements, discretion as to the use of the amounts. I have enclosed a copy of Interpretation Bulletin IT-530, Support Payments, which provides additional information on these requirements in paragraphs 26 to 32.
Based on the documents you provided, it does not appear that your spouse has discretion as to the use of the life insurance premiums. Accordingly, these amounts are not deductible as support amounts.
I trust my comments explain the CCRA's position on this matter.
Yours sincerely,
Bill McCloskey
Assistant Commissioner
Policy and Legislation Branch
Attachment
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