12 June 1990 External T.I. 900760 F - Alimony and Maintenance Payments

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.

SUBJECT: Alimony and Maintenance Payments Pursuant to a Demand under Provincial Court Rules

This is in reply to your memorandum of May 10, 1990, wherein you requested our opinion on whether alimony payments made pursuant to a Demand under the Alberta Rules of Court signed by one spouse and consented to in the "notice of writing" by the other spouse would, provided the other requirements of paragraphs 60(b) or (c) of the Income Tax Act (the "Act") are met, generally be deductible thereunder.

We advise that while alimony payments made pursuant to a Demand under the Alberta Rules of Court signed by one spouse and consented to in the "notice of writing" by the other spouse would be considered to be a "written agreement", we are of the view that the agreement would not constitute a "written separation agreement" for the purposes of paragraph 60(b) of the Act.  We note paragraph 60(b) of the Act states, in part, "an amount paid by the taxpayer in the year,...pursuant to a written agreement,...if he was living apart from, and was separated pursuant to a divorce, judicial separation or written separation agreement..".  The missing ingredient in the above instance is a statement indicating that both parties will continue to live separate and apart.  An agreement which is lacking in this respect has been considered by the Courts not to be a valid separation agreement.  In this regard, please refer to Perley C. Smith vs MNR 79 DTC 827 and Daniel Kapel vs MNR 79 DTC 199.

Concerning the deductibility of the payments pursuant to paragraph 60(c) of the Act, we are also of the view that the Demand cannot be considered to be an order of a competent tribunal and, as indicated by the taxpayer's solicitor, this position is supported in the Federal Court of Canada case William Edward Horkins vs Her Majesty The Queen 76 CTC 52.  We have also given an opinion that payments made under a paternity agreement or a separation agreement when filed with the Provincial Court (Family Division) of Ontario pursuant to section 35 of the Family Law Act, 1986 do not satisfy the provisions of paragraph 60(c.1) of the Act unless the agreement is subsequently incorporated in a court order and further provided that at the time the payments were made and throughout the remainder of the year the taxpayer making the payments was living apart from the recipient.

M.A. Hiltzfor Director GeneralSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch