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 Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
March 3, 1994
Edmonton District Office Head Office
Client Assistance Division Rulings Directorate
Linda Seidler J.A. Szeszycki
957-8953
940534
Common-law Relationships and the Equivalent-to-Spouse Credit
This is in reply to your note of March 1, 1994 in which you requested clarification as to the availability of the equivalent-to-spouse credit in 1993 in circumstances where a single mother with two children begins to cohabit in a conjugal relationship with a person of the opposite sex at some time during that year.
The main issue raised by your enquiry is whether under these circumstances a spousal relationship is created and, if so, when that relationship is considered to have begun for the purposes of the Income Tax Act. As you are aware, subsection 252(4) of the Act extends the definition of "spouse" to include parties to a common-law relationship as long as the criteria set out in that provision are met. In order to establish a spousal relationship paragraph 252(4)(a) requires that the individuals (of the opposite sex) cohabit in a conjugal relationship and either so cohabit throughout a 12-month period or that each be a parent of a child of whom the other is a parent.
While it is clear that the parental alternative criteria would be met if the child in question were the natural child of their relationship, it is our view that it would also be met if an existing child (not a product of that relationship) were brought into the relationship. The wording of subparagraph 252(4)(a)(ii) does not restrict its application to the natural offspring of the relationship. Consequently, the provisions of subsections 252(1) and (2) will apply to characterize each individual as a parent of the child in situations where there is a legal, or factual, adoption of that child.
Whether an adoption-in-fact has taken place is indeed a question of fact and such a determination would have to be made upon consideration of the circumstances. We would emphasize that, in our view, the start of cohabitation does not, by itself, trigger an adoption-in-fact of children brought into the relationship. For an adoption to be considered factual the circumstances must show that the child is in the custody and control of the "adopting" parent who is in a position to exercise effective parental care and guidance on a continuing basis.
Where such is the case, a spousal relationship will be considered to have begun at the time when the couple began to cohabit in a conjugal relationship and could both be considered to be factual parents of the child. It is not clear from the limited information provided in your example whether or not this occurred in 1993. This may be determined through a finding of fact based on information provided by the cohabitants themselves. Once it is established that a spousal relationship has begun then the provisions of paragraphs 252(4)(c) and (d) apply to ensure that the relationship is treated as a marriage for all purposes of the Act including those dealing with personal credits.
Where there is a change in marital status in the year it is possible for a particular individual to have met the criteria set out in both paragraphs 118(1)(a) and (b) at different times in the year. It is the Department's established practice, in such cases, to allow the individual to claim the credit most beneficial to him or her. That practice would appear to apply to the mother in your example. The "adopting" parent would appear to be eligible for consideration for the claim under paragraph 118(1)(a) but not for the equivalent claim under paragraph 118(1)(b), since it would not be likely that at a time when that parent was single he or she was supporting the child in a self-contained domestic establishment in which that parent was also residing. As well, the limitation found in paragraph 118(4)(b) would limit the equivalent-to-spouse personal credit to one child in relation to the same domestic establishment.
We hope our comments will clarify the matter for you.
P.D. Fuoco
Section Chief
Personal and General Section
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
c.c.Client Assistance Directorate
c.c.Assessment of Returns Directorate - T1 Programs Division
c.c.Ottawa District Office - Client Assistance Division - Nancy York
c.c.Winnipeg Processing Centre -
Enquiries and Adjustments Division
- Heather Molyneux
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