4 January 2000 Ministerial Letter 9933028 - EQUIVALENT-TO-SPOUSE TAX CREDIT

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: A taxpayer is separated from his spouse because of marital breakdown but is living in the same house as his spouse and child until the house can be sold. Is the taxpayer entitled to claim the equivalent-to-spouse tax credit for his son?

Position: Question of fact

Reasons: See 9714368, 9511795, 9612947, 9833139, 9833137, 9902035.

		January 4, 2000

	Richard Gendron	HEADQUARTERS
	Manager	G. Moore
	Ministerial Correspondence Section	952-1506
	Tower C, Room 100
	25 McCarthur, Vanier

	Attention: Jodie McGetchie	4-993302

Insert For Ministerial Correspondence - XXXXXXXXXX

In response to your request, we are providing you with the following insert to be included in the reply to the queries raised by the above-mentioned taxpayer regarding his entitlement to the equivalent-to-spouse tax credit under paragraph 118(1)(b) of the Income Tax Act:

"Paragraph 118(1)(b) of the Income Tax Act permits any individual who is not entitled to a deduction for the spousal tax credit and who, at any time in the year, was either unmarried or a married person who neither supported nor lived with a spouse and is not supported by a spouse, and who either jointly or individually maintained a self-contained domestic establishment in which the individual actually supported at that time (i.e. at any time in the year) a dependent person, to claim the equivalent-to-spouse amount. The word "support" is not defined in the Income Tax Act. In general terms, support includes the provision of the basic necessities of life such as food, shelter and clothing but includes financial and non-financial support. It is a question of fact whether 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).

It is possible for spouses to be living separate and apart because of a breakdown of their marriage while still occupying the same residence. This issue was examined by the Tax Court of Canada in 1986 (Longchamps et al. v. M.N.R., 86 DTC 1694) and it has also been examined by the courts in the context of divorce law. In divorce cases, the courts look to see whether there is an intent by one or both of the spouses to separate. For example, physical separation without an intention to separate is not sufficient to constitute "living separate and apart". The courts look at a number of indicators when deciding whether a couple residing in the same residence are nevertheless physically living separate and apart. They look to see if the customary behaviour of the spouses is present such as joint social ventures, communication and discussion of family problems, sexual relations and so on. Of somewhat lesser importance is whether either spouse performs any personal domestic services for the other such as cooking meals or doing laundry. The courts may also look as to why both spouses continue to reside in the same residence if they intended to live separate and apart. In the Longchamps case, the court decided that although living under one roof, the spouses were living separate and apart because the husband could not afford to live elsewhere. In addition, they had separate bedrooms, the wife managed the household and cared for the children, both spouses considered the husband to be a boarder in the home, the husband bought his own food, the spouses did not socialize together and the spouses rarely spoke to each other. The evidence in that case established that while the spouses were living under the same roof, they were pursuing their respective activities as strangers to one another or as if the other did not exist.

Whether two spouses are living separate and apart is a question of fact, and each case must be decided upon its own facts. However, based on the information available, it appears that given the criteria considered by the courts in making such a determination in divorce cases and in the Longchamps case mentioned above, you and your spouse appear to have been living "separate and apart" because of a breakdown in your marriage for the XXXXXXXXXX taxation years. Accordingly, since you would not be considered to be living with your spouse for the XXXXXXXXXX taxation years for purposes of subparagraph 118(1)(b)(i) of the Income Tax Act, you would be entitled to claim the equivalent-to-spouse tax credit in respect of your son for those years as long as all the other criteria in paragraph 118(1)(b) of the Income Tax Act are met and as long as no other individual also claims your son for the equivalent-to-spouse tax credit for those years."

J. Wilson
A/Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

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