Principal Issues: Application of subsection 153(1) to the payment of an amount as a distribution out of or under a RCA that can reasonably be considered to have been received, in respect of an office or employment of the Taxpayer, by a Former spouse of the taxpayer, pursuant to the terms of a court order or a separation agreement.
Position: The Former spouse is the “payee” for purposes of subsection 153(1) and the “employee” for purposes of Part I of the Regulations in respect of the RCA Payment. Thus, for purposes of determining the amount to be withheld, the “employee” is the Former spouse, and any such amount withheld from the RCA Payment is to be remitted on account of the income tax of the Former spouse for the year. Under subsection 200(1) of the Regulations, a T4A-RCA Form is to be issued to the Former spouse in respect of the RCA Payment.
Reasons: Prior positions, wording of the Act and Regulations.
