21 January 1998 External T.I. 9726745 - CHILD SUPPORT PAYMENTS

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 payments made prior to 1997 can be used to have an agreement or order deemed to be made in 1996.

Position:

No

Reasons:

Coming-into-force provision clearly indicates that paragraphs 56.1(3)(b) and 60.1(3)(b) apply to payments made after 1996.

972674
XXXXXXXXXX J.E. Grisé

Attention: XXXXXXXXXX

January 21, 1998

Dear Sirs:

Re: Child Support Payments

This is in reply to your letter of September 30, 1997 concerning paragraphs 56.1(3)(b) and 60.1(3)(b) of the Income Tax Act.

The information you provided us relates to a specific proposed transaction. As discussed during a telephone conversation between Messrs XXXXXXXXXX and Jacques Grisé, confirmation of the tax consequences of such a transaction will only be provided in response to a request for an advance income tax ruling. The procedures for requesting an advance income tax ruling are set out in Information Circular 70-6R3, Advance Income Tax Rulings. However, we will provide you with some general comments which may be of some assistance.

Paragraphs 56.1(3)(b) and 60.1(3)(b) of the Act are only applicable to amounts received and paid after 1996. In this respect, please refer to section 9 of Chapter 25 of the 1997 Statutes of Canada. Accordingly, an agreement or order cannot be deemed to have been made prior to 1997 pursuant to paragraphs 56.1(3)(b) and 60.1(3)(b) of the Act.

Furthermore, if paragraphs 56.1(3)(b) and 60.1(3)(b) of the Act deem an agreement or order to have been made between January 1, 1997 and April 30, 1997, the variance of child support amounts payable will cause the exception in paragraphs 56.1(3)(b) and 60.1(3)(b) of the Act to apply. The exception applies to an order or agreement made after April, 1997 that varies a child support amount payable to the recipient from the last such amount paid to the recipient before May, 1997. Paragraphs 56.1(3)(b) and 60.1(3)(b) of the Act would deem such an order or agreement to have a commencement day which is the day on which the first payment of the varied amount is required to be made.

Yours truly,

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