30 September 2010 External T.I. 2010-0365391E5 - Amounts in respect of Non-resident dependants

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: Can an individual claim the Equivalent-to-spouse Tax Credit in respect of providing basic support for a parent who is a resident of a foreign country?

Position: Question of fact, but generally no.

Reasons: Parent must be resident in Canada & living with supporting individual.

XXXXXXXXXX
									2010-036539
									W. Doiron

September 30, 2010

Dear XXXXXXXXXX :

Re: Equivalent-To-Spouse Tax Credit in respect of non-resident parent

This letter is in response to your email dated April 27, 2010. Specifically, you ask whether an individual can claim the Equivalent-To-Spouse Tax Credit ("ETSTC") in respect of providing basic support for a parent who is resident in a foreign country.

The particular situation outlined in your email appears to relate to a factual one, involving a specific taxpayer. Written confirmation of the 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, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant tax services office. We are, however, prepared to offer the following general comments, which may be of assistance.

All statutory references in this letter are references to the provisions of the Income Tax Act, R.S.C. 1985 (5th supp.) c. 1, as amended (the "Act").

General comments

Pursuant to paragraph 118(1)(b), an individual who does not claim a spousal tax credit for the year and who, at any time in the year, was unmarried and not living in a common-law partnership, or was married or in a common-law partnership but neither supported nor lived with their spouse or common-law partner and who is not supported by such person, may, subject to certain other requirements, claim an ETSTC for his or her parent if, at that time:

• the individual maintains and lives in a self-contained domestic establishment ("residence") either alone or with other persons;
• the individual actually supports that parent in that residence; and
• that parent is a resident of Canada and is wholly dependent for support on the individual.

Based on the limited information provided by you, to claim the ETSTC the legislation requires, among other things, your parent to live in your home and also be a resident of Canada. Since the criteria has not been met in your case, you cannot claim the ETSTC. For further information, we refer you to Interpretation Bulletin IT-513R, Personal Tax Credits.

We trust these comments will be of some assistance.

Yours truly,

Lita Krantz
Assistant Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch