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.
Principal Issues: 1. Can a legally separated couple continue to share the same residence but still meet the ITA requirement of living separate and apart?
Position: 1. Yes.
Reasons: 1. The couple must establish a general requirement that there is an intention to separate. However, when they continue to reside in the same residence, it is an issue of fact as to whether they are living separate and apart.
August 31, 2010
Dear XXXXXXXXXX :
Re: Marital Status
This is in response to your correspondence of July 29, 2010 asking for information on the Canada Revenue Agency's (CRA) application of the Income Tax Act (ITA) where a legally separated couple continued to share the same residence. Specifically, you are asking for clarification of the expression "living separate and apart" where two legally separated individuals continue to share the same residence.
Written confirmation of the income tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. However, we are prepared to offer the following comments.
Although your correspondence seeks clarification on the expression "living separate and apart" as it relates only to the Child Tax Credit and GST/HST credit, the expression "living separate and apart" is used extensively in the ITA including the deduction for support amounts, the determination of the eligible dependant tax credit, the Child Tax Credit, the Canada Child Tax Benefit, the Working Income Tax Benefit and the GST/HST credit.
While each case must be decided upon its own facts, the CRA previously confirmed in Rulings document E9902035, a copy of which is enclosed, that it is possible for spouses to live separate and apart while occupying the same residence. Where the residence contains two or more distinct household units with separate entrances and amenities (e.g. kitchen, bathroom), the degree of separation is easier to evaluate. Where there is only one distinct household unit, the CRA will undertake a more in-depth review to determine whether the individuals are living separate and apart. As part of its review of a particular case, the CRA will give consideration to the existence of a court order or agreement; however, the only legal authority for determining benefit eligibility is the ITA.
The general requirement is there must be an intent by one or both of the spouses to separate. In the context of family law, the intention to separate has been expressed in a number of ways including breakdown of the marriage or common-law partnership, an intention to destroy the matrimonial consortium and separation without a reasonable prospect of reconciliation. Physical separation without an intention to separate is not sufficient to constitute "living separate and apart".
The courts have looked at a number of indicators when deciding whether a couple residing in the same residence are nevertheless physically living separate and apart. Some of the indicia of separation are the following:
(a) Physical separation;
(b) Withdrawal by one or both of the spouses from the matrimonial obligation with the intent of destroying the matrimonial consortium or of repudiating the marital relationship.;
(c) Absence of sexual relations is not conclusive, but is a factor to consider;
(d) Lack of communication between the spouses and discussion of family problems;
(e) Absence of joint social activities;
(f) Meal pattern;
(g) Performance of household tasks;
(h) Making plans for his or her assets as a separated person;
(i) The relationship and conduct of each of them toward members of their respective families and how did such families behave towards the parties;
(j) The financial arrangements between the parties regarding the provision of or contribution toward the necessaries of life (food, clothing, shelter, recreation, etc.)
In applying the provisions of the ITA, the CRA will give consideration to all the documentation and factors to ascertain whether the couple is living separate and apart. For the purposes of determining eligibility for family benefits, where the individuals continue to reside in the same household, the CRA will not consider the individuals to be living separate and apart where one or more of the following conditions exist:
- sharing of household expenses and responsibilities;
- sharing of parental responsibilities;
- sharing of property and resources; or
- the existence of social bonds between the individuals (presenting themselves in social situations as spouses or common-law partners).
We trust the above comments are of assistance.
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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