28 September 1999 External T.I. 9916235 - SPOUSAL QUAL. -SEPARATE & APART

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.

xxxxxxxxxx					991623
C. Tremblay
Attention:  xxxxxxxxxx

September 28, 1999

Dear XXXXXXXXXX:

Re: Spousal Qualification

This is in reply to your facsimile of June 9, 1999, wherein you requested an opinion as to whether a former husband and wife will be considered to be living separate and apart (i.e. not spouses) for income tax purposes in the situation given. You also asked what documents the couple would require to produce in case of dispute.

In the situation presented, the husband and wife have been divorced for over a year. All assets have been divided including the matrimonial home of which the ex-husband sold his half interest to his ex-wife. The ex-husband has signed a lease agreement with his ex-wife to rent her self-contained basement apartment with separate entrance for $500.00 a month,

Our Comments

Written confirmation of the consequences inherent in particular transactions are given by this Directorate only where the transactions are proposed and are the subject matter of an advance tax ruling request submitted in the manner set out in Information Circular 70-6R3. Where the particular transactions are partially completed or completed, the enquiry should be addressed to the relevant Tax Services Office. More particularly, in issues such as this, the local Tax Services Office is generally in a better position to determine if a spousal relationship exists. However, we are prepared to offer the following general comments which are of a general nature.

Whether two individuals are living separate and apart is a question of fact, and each case must be decided on its own facts. Paragraph 252(4) (a) of the Income Tax Act (the "Act") extends the meaning of "spouse" to those couples cohabiting in a conjugal relationship at the relevant time. Generally, in a situation where the ex-husband rents a self-contained basement apartment from his ex-wife, the presumption is that they are living separate and apart and are not spouses under the Act. However, it is a question of fact and, in case of dispute, the Department would want to consider all the relevant information which may include, among other things, a tour of the self-contained basement apartment as well as an examination of the lease agreement.

In a situation where a couple is living in the same residence, the courts have looked at the following factors to decide whether two individuals are living separate and apart; the customary behaviour of spouses such as joint social ventures, communication and discussion of family problems, sexual relations, and so on and whether either individual performs any domestic services for the other such as doing laundry and cooking meals. The courts may also consider why both individuals continue to reside in the same residence if they intend to live separate and apart.

We trust our comments are of assistance to you

Yours truly,

Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch