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:
Can an adult child claim the caregiver amount for a parent whom the parent's spouse has claimed the spouse or common-law partner amount?
Position TAKEN:
Yes.
Reasons:
Although the determination is a question of fact, there is nothing in the Act to deny the credit if the requirements of the provision are otherwise met.
XXXXXXXXXX T. Young, CA
2003-002076
October 3, 2003
Dear XXXXXXXXXX:
Re: Caregiver Amount
We are writing in response to your letter dated May 27, 2003, concerning the caregiver amount.
In your letter, you outlined the following scenario:
? The taxpayer, who is single with no children, lives with both her parents in a self-contained domestic establishment owned by her father.
? The taxpayer pays all of the costs of maintaining the house, i.e., property taxes, insurance, utilities and other maintenance costs. Although the bills for these costs are issued in her father's name, her banking records indicate that she pays these costs.
? The father's income is about $20,000 per year and the mother's income is about $7,000.
? The father claims the "Spouse or Common-law Partner Amount" under paragraph 118(1)(a) of the Income Tax Act (the "Act"). He also claims the Ontario Property Tax Credit.
You have asked if the taxpayer can claim the "Caregiver Amount" pursuant to paragraph 118(1)(c.1) of the Act.
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. The particular circumstances in your letter relate to a factual situation involving a specific taxpayer. The tax consequences of completed transactions can only be determined after a review of all of the relevant facts and documentation, which is the responsibility of the local tax services office. However, we are prepared to provide the following comments, which may be of assistance to you.
Paragraph 118(1)(c.1) of the Act states, in part,
...in the case of an individual who, at any time in the year alone or jointly with one or more persons, maintains a self-contained domestic establishment which is the ordinary place of residence of the individual and of a particular person... (emphasis added)
Since the term "maintains" is not defined in the Act, one must look to the meaning of these terms, as they are ordinarily defined and understood. Black's Law Dictionary defines "maintain" to include:
To care for (property) for purposes of operation, productivity or appearance; to engage in general repair and upkeep.
We agree with your view that this definition can include a situation where an individual pays the expenses to maintain the self-contained domestic establishment even though the property is owned (or rented) in another person's name. We also reviewed the restrictions contained in subsection 118(4) on claiming the credits in subsection 118(1) and agree that none of the restrictions, in and of themselves, would apply to prevent the taxpayer from claiming the Caregiver Amount.
Therefore, it is our view that it may be possible for a taxpayer in the situation you describe to claim the Caregiver Amount providing the taxpayer otherwise meets all the requirements of the provision. However, in order to do so, the taxpayer will need to show that she does, in fact, maintain the residence either alone or jointly with her father.
We also note that, because the taxpayer's father has claimed the Spouse or Common-law Partner Amount, paragraph 118(4)(a.1) of the Act prevents the taxpayer from claiming the Amount for an Eligible Dependent under paragraph 118(1)(b).
For more information on claiming the Caregiver Amount, please refer to the instructions for "Line 315 - Caregiver amount" in the T1 General Income Tax and Benefit Guide for the year in question. For assistance in determining if the particular taxpayer you describe is able to claim the Caregiver Amount, please contact the Client Services Division of your local Tax Services Office.
With respect to your question regarding the Ontario Property Tax Credit, as this is a provincial credit, you should direct your enquiry to your local Ontario Ministry of Finance Tax Office.
The documents referred to above may be found on our web site at www.ccra.gc.ca. We trust our comments will be of assistance to you.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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