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.
We are writing further to your letters of February 5 and June 9, 1987, and to ours of March 10, 1987.
As a result of further information made available to us regarding the plaintiff's Statement of Claim and your client's Statement of Defence, relative to the XXX Judgment of the Family Division of the Supreme Court of Ontario, we have revised our views regarding the income tax consequences for both your client and the plaintiff.
It would appear that the plaintiff in this case sued your client for financial support for both the child and herself as a “spouse” under the Family Law Act of Ontario. In his judgement Justice Galligan awarded the plaintiff support for the child and, at paragraph 4 of the judgement, dismissed the balance of her claim with the following statement:
- “The claim of the plaintiff as a spouse pursuant to the Family Law Act of Ontario, or any succession legislation thereto, and her claim for support for herself, are dismissed.”
As a consequence, it is our view that the plaintiff would not be “an individual within a prescribed class of persons described in the laws of a province” for purposes of paragraphs 56(1)(c.1), 60(c.1) and 212(1)(f) of the Act and section 6502 of the Regulations.
Section 6502 of the Regulations, which was referred to in the previous letter sets out the following two conditions that must be met in order for the plaintiff to be “an individual within a prescribed class of persons...”
- • the individuals had to be parties to proceedings giving rise to an order made in accordance with the laws of Ontario; and
- • the individuals, at the time the application for the order was made, had to be persons described in subclause 14(b)(i) of the Family Law Reform Act of 1980.
Section 29 of the Family Law Act, 1986, which supersedes subclause 14(b)(i) above, states, in part, that “spouse”... includes either of a man and woman who are not married to each other and have cohabited
- a) continously for a period of not less than three years, or
- b) in a relationship of some permanence, if they are the natural or adoptive parents of the child.”
Since the plaintiff is not a “spouse” for purposes of the Family Law Act, 1986, she does not fulfil the second condition set out in section 6502 of the Regulations and is not, therefore, “an individual within a prescribed class of persons”.
In view of the foregoing, it is our opinion that paragraph 56(1)(c.1) of the Act would not apply to the plaintiff and, by extension, no withholding tax could be required under paragraph 212(1)(f) of the Act on the payment made to her.
Similarly, it is also our view that the payments made by your client to the plaintiff would not be deductible under paragraph 60(c.1) of the Act.
Should you disagree with our views in this matter we would suggest that you contact the Kitchener District Taxation Office for further consideration of these issues. In this regard we would suggest that all documentation, relevant to both sides of this case, be submitted at that time.
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© Sa Majesté la Reine du Chef du Canada, 1987
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