25 March 1997 External T.I. 9700965 - AFTER DEATH OF PARENT CHILD-IN-LAW NO LNGER CHILD OF TP

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 the child of a spouse of a taxpayer continues to be the child of the taxpayer after the death of the spouse if 252(1)(c) is the only reason by which the child would be a child of the taxpayer

Position:

no

Reasons:

while some of cases decided on 252 when the reference was to daughter-in-law or son-in law found that the relationship continued after the death of the spouse of the daughter-in-law or son-in-law, the def'n of spouse is important for the def'n of child & as stated in para 31 of IT-249R3, the child relationship must exist at the time of the death of the owner of the farm which is being "rolled over". Since the def'n of spouse does not include former spouse, the child relationship will cease on the death of the spouse who is the natural parent of the child. This is consistant with the positions taken in respect to "related persons" "associated corporations", etc.

A. Humenuk
XXXXXXXXXX		970096

Attention: XXXXXXXXXX

March 25, 1997

Dear Sirs:

Re: Meaning of Child

We are replying to your letter of January 10, 1997, in which you requested our opinion on the application of the definition of a "child," within the meaning assigned by subsections 70(10) and 252(1) of the Income Tax Act, for the purpose of subsections 70(9.2) and 73(4) of the Act.

In particular, you asked whether an individual is still considered to be the child of the individual's step-parent (the spouse of the individual's natural parent) after the death of the natural parent for the purpose of the rollover provisions noted above. The issue is only relevant when the individual would not otherwise qualify as a child of the step-parent because the individual was at no time wholly dependent on the step-parent and was not adopted in law or in fact by that step-parent.

When an individual has previously been established to be the child of the individual's step-parent (the spouse of the individual's natural parent) by reason of paragraph 252(1)(c) (and no other provision applies), it is our view that the individual will no longer qualify as the child of the step-parent after the death of the individual's natural parent for all purposes of the Act. As a result, subsections 70(9.2) and 73(4) will not apply with respect to a transfer from the step-parent to the individual or to the children of that individual.

We trust this is the information you require.

Yours truly,

John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch