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:
whether alimony or maintenance payments to a former spouse, paid pursuant to a court order, now paid to a Public Trustee because the former spouse has been placed in a mental institution, are still deductible to the payer.
Position TAKEN:
Yes.
Reasons FOR POSITION TAKEN:
Public Trustee acting on behalf of, as agent for, and for the benefit of the former spouse, so that payments to PT would be considered payments to former spouse.
November 15, 1994
Winnipeg District Office J.A. Szeszycki
Enquiries and Adjustments Section (613) 957-8953
Attention: James Simpson
942444
Alimony Payments to Public Trustee
This is in reply to your letter dated September 21, 1994 in which you requested our views on the continued deductibility of maintenance payments, under paragraph 60(b) of the Income Tax Act, made pursuant to a court order, once the recipient former spouse has been placed in a mental hospital and the payments are directed to the Public Trustee acting on the recipient's behalf.
We have reviewed the provisions of the Mental Health Act of Manitoba (the MHA) and note that subsection 65(1) of the MHA authorizes a committee to take custody of the estate of a mentally disordered individual and to, among other things, "collect in and receive debts owing to him.". Subsection 80(1) of the MHA sets out circumstances under which the Public Trustee can be authorized to act as the committee. Other provisions of the MHA, such as subsection 82(1) and sections 69 and 70, describe the mandate of the Public Trustee in managing the estate of the mentally disordered person and to use the resources of the estate to provide for the maintenance of that individual.
It is our view that payments made to the Public Trustee are payments made to the former spouse and received by the Public Trustee on behalf of that person. The payments would continue to be considered as being for the maintenance of the former spouse and likely dispensed by the Public Trustee for that purpose. Consequently, the payments would continue to be deductible to the payer under paragraph 60(b) of the Income Tax Act.
P.D. Fuoco
Section Chief
Personal and General Section
Business and General Division
Rulings Directorate
Policy and Legislation Branch
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