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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: 1. whether there has been a breakdown in conjugal relationship so as to not entitle the taxpayer to a credit for support of non-resident "common-law spouse"
Position: 1. question of fact however likely not entitled to the credit.
Reasons: 1. as per T1 guide and IT-513R- proof of support is required & also taxpayer never resumed cohabitation or cannot provide proof of cohabitation versus visitation. In addition, the taxpayer originally claimed to be divorced for the years at issue.
June 11, 2002
Toronto Centre TSO HEADQUARTERS
Ms Theresa Darrigo Lena Holloway, CA
(613) 957-2104
2002-012603
XXXXXXXXXX
This is in reply to your letter faxed to us on February 28, 2002 regarding the above-noted taxpayer's claim for a spousal credit for support of an individual he claims was his common-law spouse. The facts as presented to us follow:
Facts
XXXXXXXXXX
XXXXXXXXXX is looking for an adjustment to line 303 for tax years XXXXXXXXXX, as this will reduce his large tax balance currently outstanding. As noted above, he originally filed these returns with the marital status showing as "divorced" for all those years. Note that we have assumed that this reference to XXXXXXXXXX being divorced refers to a former marriage of his, a relationship distinct from the one currently in question. To assume otherwise would make XXXXXXXXXX current claim of living conjugally conflict completely with his original claim.
Based on the above information provided, you have asked:
1) As XXXXXXXXXX lived with XXXXXXXXXX for XXXXXXXXXX months outside of Canada from XXXXXXXXXX and the proposed legislation for common-law spouses did not come into effect in Canada until 1992, does the time frame that they cohabitated (pre-1992 and outside Canada) qualify for the purposes of the 12 continuous months of cohabitation?
2) XXXXXXXXXX states that during the years of XXXXXXXXXX he "visited" XXXXXXXXXX once or twice a year and stayed with XXXXXXXXXX at her place of residence, or at other times she "visited" Canada. Do these visits qualify as cohabitation?
3) If it is found that XXXXXXXXXX did maintain a common-law relationship for the years XXXXXXXXXX, must the client provide the requested proof of support and XXXXXXXXXX net world income for said years?
All references hereunder will be to the Income Tax Act (Canada) (the "Act") unless otherwise noted.
Your questions are only relevant if we accept XXXXXXXXXX claim that their separation was not due to a breakdown in the conjugal relationship. Whether a conjugal relationship exists, is a question of fact, which cannot be determined, based on the limited facts noted above. If there are additional facts or if some of the facts vary from those presented above, a response may differ. Pursuant to former subsection 252(4) once a taxpayer and another person cohabit in a conjugal relationship, they are deemed to be cohabiting in a conjugal relationship at any time after that, unless they have not cohabited for a period of at least 90 days because of a breakdown of their conjugal relationship.
We have publicly issued statements on what the CCRA will consider in determining whether a conjugal relationship exists. In particular, a series of questions and answers released on February 15, 2000 concerning the same-sex partner legislation (that received Royal Assent on June 29, 2000) would have relevance to any conjugal relationship. The relevant excerpts follow:
Q.6 How do you determine who is living in a conjugal relationship? Married persons have their status legally registered in a public document, but same-sex partners do not.
A.6 Neither do opposite-sex common-law partners. We will proceed exactly as we have proceeded these past years with opposite-sex, common-law couples. We have a self-assessment system in which clients are expected to be truthful and in which persons who make false declarations can be penalized. Whether or not two persons -opposite-sex or same-sex- are living in a conjugal relationship is a question of fact. This can include whether or not the couple presents itself publicly as a conjugal couple, has claimed the status of a couple for purposes of a pension or health plan, etc. Besides, clients who fail to identify themselves as common-law partners in order to avoid losing some benefits may well find that they are also depriving themselves of important tax benefits and pension rights.
In the discussion of what constitutes a "conjugal relationship" there is one case in particular in which the courts provide some guidelines. This case was validated by the Supreme Court of Canada in M.v H ([1999] 2 S.C.R. 3, 46 R.F.L. (4th) 32) where the following was stated at paragraphs 59 and 60:
"Molodowich v Penttinen (1980), 17 R.F.L. (2d) 376 (Ont. Dist.Ct), sets out the generally accepted characteristics of a conjugal relationship. They include shared shelter, sexual and personal behaviour, services, social activities, economic support and children, as well as the societal perception of the couple. However, it was recognized that these elements may be present in varying degrees and not all are necessary for the relationship to be found to be conjugal. While it is true that there may not be any consensus as to the societal perception of same-sex couples, there is agreement that same-sex couples share many other "conjugal" characteristics. In order to come within the definition, neither opposite-sex couples nor same-sex couples are required to fit precisely the traditional marital model to demonstrate that the relationship is "conjugal".
Certainly an opposite-sex couple may, after many years together, be considered to be in a conjugal relationship although they have neither children nor sexual relations. Obviously the weight to be accorded the various elements or factors to be considered in determining whether an opposite-sex couple is a conjugal relationship will vary widely and almost infinitely. The same must hold true of same-sex couples. Courts have wisely determined that the approach to determining whether a relationship is conjugal must be flexible. This must be so, for the relationships of all couples will vary widely."
It is difficult to offer further comments (in relation to your first two questions) on whether in fact the scenario presented constitutes, in our view, the continuance of a conjugal relationship as all the facts of the situation have not been presented (i.e. exact dates of visits, lengths of stays). Nonetheless, based on the limited facts provided, in our view, the continuance of the conjugal relationship appears to be doubtful in light of the fact that the individuals never resumed cohabitation after XXXXXXXXXX and XXXXXXXXXX presented himself as divorced for the years at issue. We note however that XXXXXXXXXX were in fact married in XXXXXXXXXX (we assume this fact has been verified) which may lend credibility to their claim of maintaining their conjugal relationship.
Former subsection 252(4) extended the meaning of "spouse" so that it included opposite sex common-law couples. If you were to accept that they met the extended meaning of spouse for the years under question (excluding 1992, as subsection 252(4) was applicable after 1992) the concern becomes whether in fact XXXXXXXXXX supported his spouse, as required under paragraph 118(1)(a). The Act does not distinguish between persons supporting a spouse in Canada and those supporting a spouse in a foreign country. However, much of the case law has focused on whether the amounts spent constitute "support" (i.e. sufficient support) in order to justify a taxpayer's claim for a dependant. It is a question of fact whether a particular individual supports a non-resident spouse, and the factors to consider are outlined in paragraph 35 of IT-513R.
The taxpayer is seeking to claim the spousal credit for the years XXXXXXXXXX, although as noted above a claim for 1992 cannot be allowed as the relevant legislation was enacted as applicable after 1992. The 1993 T1 guide describes Line 303 as follows:
"You may be able to claim a personal amount for certain dependants who live outside Canada, if they were dependent on you for support. You may be able to make this claim for your spouse, or for your or your spouse's children and grandchildren who were born in 1975 or earlier and who were mentally or physically infirm. You cannot claim an amount for any other relatives who lived outside Canada for all 1993.
If your dependants already have enough income or assistance for a reasonable standard of living in the country in which they live, we do not consider them to depend on you for support. Also, we do not consider gifts you send to them to be support.
How to claim
Follow the instructions at lines 303 and 306 to calculate your spousal amount, and additional personal amounts.
Attach proof of your support payments to your return. The proof of payment has to show your name, the amount, the date of the payment, and the dependant's name and address. If you sent the funds to a guardian, the guardian's name and address also have to appear on the proof of payment.
Similar comments to those quoted above regarding the requirements for evidence are also reflected in paragraphs 35 to 38 of IT-513R. Therefore, in response to your third question, it appears to be longstanding CCRA policy to require proof of support. Given that proof of dependency and support would have to consider XXXXXXXXXX income, we believe that the CCRA would also be justified in requesting documents substantiating XXXXXXXXXX world income.
For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the CCRA's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the electronic library version or they may request a copy severed using the Privacy Act criteria which does not remove client identity. Requests for this latter version should be made by you to Jackie Page at (819) 994-2898. The severed copy will be sent to you for delivery to the client.
We trust the above comments will be of assistance to you.
Milled Azzi, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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