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.
Re: The Goods and Services Tax Credit
This is in reply to your memorandum of July 15, 1991 in which you asked us for our views on whether two individuals would be considered to be living separate and apart" in certain circumstances for the purposes of the definition of "qualified relation" in subsection 122.5(1) of the Income Tax Act (the Act).
You describe a situation where two individuals who are married, or have entered into a similar type of conjugal relationship, are not living together at the end of the year because an illness of one of the spouses has confined that person to a hospital or nursing home for an extended period of time.
The definition of "qualified relation" in subsection 122.5(1) of the Act refers in part to the "individual's spouse who, at the end of the year, is not living separate and apart from the individual by reason of the breakdown of their marriage or other conjugal relationship."
It is your opinion that since the two individuals in the above situation are not living separate and apart by reason of a breakdown of the marriage or other conjugal relationship, they are only entitled to file one claim for the GST credit under which both of their net incomes are to be taken into account in determining the amount of their credit. On the other hand, GSTC Programs Section has indicated to you that the two individuals can be considered to be living separate and apart for the purposes of the definition of "qualified relation" with the result that they would be entitled to file separate claims for the GST credit. As a result of the two different opinions, you have asked us for our views so that the issue at hand can be resolved.
It is our view that the phrase "breakdown of their marriage or other conjugal relationship" refers to situations where two individuals are living separate and apart as a result of marital discontent. Accordingly, we concur with your view that the hospitalization of the individual would not, in and by itself, result in a breakdown of a marriage or other conjugal relationship we have discussed this issue with Mr. Baker (Tel 952-8270) who indicated that, for example, situations are encountered where two married individuals live separate and apart because one of them is terminally ill (e g , Alzheimer's, disease). In this type of situation, it is possible that a marriage breakdown may occur while one of the individuals is permanently hospitalized although it is very difficult to obtain the relevant facts. In addition, sensitivity is usually involved in this type of situation Accordingly, where the individuals have so indicated, GST official, are inclined to accept that the two individuals are living separate and apart by reason of a breakdown of their marriage or other conjugal relationship for the purposes of the definition of qualified relation even though a formal separation agreement in respect of the breakdown of the marriage or other conjugal relationship may not be involved. However, where such is the case, the individuals would be considered to be living separate and apart for the purposes of certain other provisions of the Act, such as the transfer of unused credits to a spouse under section 118.8 of the Act
The above position of the GSTC Programs Section appears to involve an administrative practice in cases other than those where a breakdown of a marriage or other conjugal relationship actually occurs while one of the individuals in question is in an institution such as a hospital or nursing home. Under the circumstances, it would appear to be a question of policy that should be resolved with the GSTC Programs Section as, to what constitutes a breakdown in a marriage or other conjugal relationship for GSTC and other purposes. A technical issue is not involved.
In your memorandum, you also requested us to comment on whether our interpretation set out above is relevant for other tax credit calculations Section 118.8 (transfer of unused of unused credits between spouses) paragraph 118(1)(a) (the marital tax credit), and the definition of "qualified relation" in section 122.4 include references to certain individuals who are not living together by reason of a marriage breakdown. In our view, the above comments would be relevant for the purpose, of these provisions.
In the case of the child tax credit, however, the definition of "supporting person" contained in subparagraph 122.2(2)(b)(i) and (ii) respectively refer to an " ....individual (who) was married and resided with his spouse at the end of the year " and "...the individual and another person who resided together at the end of the year... " Consistent with comments in paragraph 2 of Interpretation Bulletin IT-221R2 entitled "Determination of an Individual's Residence Status", it is our view that two individuals can be considered to reside together where they, in the settled routine of their lives, regularly, normally or customarily live at the same place. Consequently, for purposes of the child tax credit, the individuals must be residing together at the sameplace. Even where a marriage breakdown has not occurred, a spouse would not be considered a supporting person if, for example, one of the individuals, terminally ill, resided at a special type of institution on a permanent basis.
We hope that the above comments are of assistance to you.
DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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