16 August 1994 External T.I. 9413765 - PERSONAL TAX CREDITS

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.

Principal Issues:

Personal Tax Credits for brother of taxpayer. Definition of Dependant.

Position TAKEN:

Question of Fact. The local District Office should be consulted.

Reasons FOR POSITION TAKEN:

Eligibility for tax credits (dependant, tuition, education, medical) will depend on whether or not the brother meets the definition of "dependant" which would be a question of fact.

				941376

XXXXXXXXXX			D. Zion

August 16, 1994

Dear XXXXXXXXXX:

Re: Personal Tax Credits

This is in reply to your letter of May 20, 1994 in which you requested our opinion concerning your entitlement to your brother's unused tuition and education tax credits. In addition, you have asked us whether there are any other personal tax credits to which you might be entitled, given the circumstances outlined in your letter.

In your letter, you indicated that you are a Canadian resident; married with two minor children. Your brother has been wholly dependent on you for support since his arrival in Canada (XXXXXXXXXX) at the age of 16 years. Your brother has been attending XXXXXXXXXX You also mention that your parents reside in Hong Kong and are also dependent on you.

Unfortunately, we have insufficient information regarding your situation to enable us to give you a definitive response. Whether or not an individual is entitled to certain personal tax credits is dependent on all the facts present in his or her individual case. Enquiries relating to a factual situation should ordinarily be submitted along with all relevant facts and documentation to your local district taxation office for their views in this regard. We will however, provide the following general comments which may be of assistance to you. In the comments that follow unless otherwise stated, all statute references are to the Income Tax Act S.C. 1970-71-72, c.63 as amended, consolidated to June 10, 1993 (the Act).

Our Comments

The Income Tax Act provides that a "child" of a taxpayer includes an individual who is wholly dependent upon the taxpayer for support and is under the custody and control, in law or in fact, of the individual. In general terms, custody involves the right of determining the residence, protection, care (physical, mental, and moral), education, and religion of a minor child and is normally attributed to the child's parent(s).

In order for a person to meet the "extended meaning of child" definition in paragraph 252(1)(b) that person must:

a)be wholly dependent upon the taxpayer for support, and

b)with respect to that person, the taxpayer has, or did have immediately before the person reached age 21, in law or in fact custody and control of that person.

An individual will be considered a supporting person of the child in a situation where one of the extended meanings of "child" apply in respect of the relationship between that individual and the eligible child.

It would be a question of fact whether or not the actions or contributions of a particular individual are of such a nature and degree that they could be said to constitute "support" of another person and that a relationship of factual dependency could be said to exist, i.e., reliance on that support.

From the limited information you have provided to us it appears possible that, subject to a review of your situation with District Office staff, you may have been eligible to claim your brother as a dependant for the years 1991 and 1992 pursuant to paragraph 118(1)(d) of the Act as it read prior to 1993.

For your general information, we are enclosing a pamphlet entitled "Students Income Tax". While the pamphlet is intended to be of assistance to students, it includes information on tuition fees and the transfer of an unused portion to a parent. This pamphlet also includes comments on an "education amount" in respect of which it is also possible for a student to transfer the unused portion of this credit to the student's parent in certain circumstances. Comments on the education amount and tuition fees are set out on pages 17 to 23 of the pamphlet. Page 23 of the pamphlet indicates that certain individuals can be considered to be a student's parent. As mentioned above, the Department considers that a parent includes an individual upon whom the student is or was, at any time, wholly dependent for support and under whose custody and control, in law or in fact, the student is or was immediately before attaining the age of 19. We have also enclosed for your information the pertinent Interpretation Bulletins for each of these tax credits which contain more detailed comments.

Finally, the medical expense credit may be available to you if you determine that your brother is indeed dependent on you for support. The expenses must also otherwise meet the requirements of subsection 118.2(2) of the Act. Further information regarding the tax credit is contained in Interpretation Bulletin IT-519, Medical Expense and Disability Tax Credits, which has also been enclosed.

We hope that the information we have provided will be of assistance to you. As indicated earlier, a more definitive determination with respect to your case by the XXXXXXXXXX District Taxation Office would be possible upon a review of all the specific facts.

We trust our comments will be of assistance to you.

Yours truly,

J.A. Szeszycki
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch