Citation: 2006TCC630
Date: 20070122
Docket: 2006-805(IT)I
BETWEEN:
MAGELLA CHABOT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Bédard J.
[1] This is an appeal
under the informal procedure, against a reassessment dated February 25, 2005,
in which the Minister of National Revenue (the Minister) disallowed a
support deduction in the amount of $5,040 claimed by the Appellant in computing
his income for the 2003 taxation year.
The facts
[2] In a judgment dated
October 25, 1993 (Exhibit I‑1, para. 8), Mr. Justice Paul Corriveau
of the Superior Court of Quebec determined that the Appellant had to pay his
ex-spouse Christine Martel $265 per month in support for their daughter Véronique
(the support).
[3] The Appellant did
not pay Ms. Martel this support from January 1, 2000, to January 1,
2002 (the relevant period). The arrears thereby accumulated during the
relevant period (the arrears) amounted to approximately $7,628.
[4] In a judgment dated
November 29, 2002, Corriveau J.
(i)
ordered
the Appellant to pay Ms. Martel the arrears;
(ii)
varied
the amount of support to be paid for the period subsequent to January 1, 2002; and
(iii)
permitted
the Appellant to deduct from the arrears the sum of $1,790 which the Appellant
had paid his daughter Véronique directly as support in
2000, 2001 and 2002 (the support paid directly).
[5] The evidence discloses that the Appellant paid
Ms. Martel some of the arrears, that is to say, $3,250, in 2003.
[6] The Appellant had
deducted the following amounts as support in computing his income for the 2003
taxation year:
(i)
the
arrears ($3,250) paid to Ms. Martel in 2003; and
(ii) the
support ($1,790) paid directly to the Appellant's daughter in 2000, 2001 and
2002.
The law
[7] The provisions of
the Income Tax Act (the Act) that are applicable to the tax treatment of
child support payments are as follows:
Section 60: Other deductions
There may be deducted in computing a taxpayer's income for a
taxation year such of the following amounts as are applicable
…
(b) Support - the total of all amounts each of which is an
amount determined by the formula
A - (B+C)
where
A is the total of all amounts each of which
is a support amount paid after 1996 and before the end of the year by the
taxpayer to a particular person, where the taxpayer and the particular person
were living separate and apart at the time the amount was paid,
B is the total of all amounts each of which
is a child support amount that became payable by the taxpayer to the particular
person under an agreement or order on or after its commencement day and before
the end of the year in respect of a period that began on or after its
commencement day, and
C is the total of all amounts each of which
is a support amount paid by the taxpayer to the particular person after 1996
and deductible in computing the taxpayer's income for a preceding taxation year….
60.1(4) Definitions -- The definitions
in subsection 56.1(4) apply in this section and section 60.
56.1 (4) Definitions -- The definitions
in this subsection apply in this section and section 56.
"child support amount" means any support amount that is
not identified in the agreement or order under which it is receivable as being
solely for the support of a recipient who is a spouse or common-law partner or
former spouse or common-law partner of the payer or who is a parent of a child
of whom the payer is a natural parent.
"commencement day" at any time of an agreement or order
means
(a) where the agreement or order is made after April 1997,
the day it is made; and
. . .
"support amount" means an amount payable or receivable as
an allowance on a periodic basis for the maintenance of the recipient, children
of the recipient or both the recipient and children of the recipient, if the
recipient has discretion as to the use of the amount, and
(a) the recipient is the spouse or common-law partner or
former spouse or common-law partner of the payer, the recipient and payer are
living separate and apart because of the breakdown of their marriage or
common-law partnership and the amount is receivable under an order of a
competent tribunal or under a written agreement; or
(b) the payer is a natural parent of a child of the recipient
and the amount is receivable under an order made by a competent tribunal in
accordance with the laws of a province.
Analysis and conclusion
[8] In my opinion, the
Appellant could, in accordance with paragraph 60(b) of the Act, deduct
the arrears as child support in computing his income because the obligation to
pay those arrears stemmed from an order that was issued on October 25,
1993, and, therefore, before April 1997. The order of November 29, 2002,
did not create a commencement day because it did not change the total child
support payable to Ms. Martel under the terms of the 1993 order. Indeed,
the order of November 29, 2002, merely confirmed the Appellant's
obligation to pay Ms. Martel the child support that she was entitled to
receive during the relevant period under the terms of the 1993 order. However,
for the following reasons, the part of the arrears ($1,790) which the 2002
order allowed to be deducted from the arrears otherwise payable is not, in my
opinion, deductible as support under paragraph 60(b) of the Act in
computing the Appellant's income:
(i) The $1,790 was not
paid in accordance with the 1993 order. Indeed, the order provided that the
Appellant was to pay $265 per month to Ms. Martel for the benefit of his
daughter Véronique. The Appellant paid this amount directly to his
daughter.
(ii) Support is only
deductible in the year that it was paid. The amount of $1,790 was paid in 2000,
2001 and 2002, not in 2003.
(iii) The amount of $1,790
is not support because the Appellant paid it directly to his child rather than
paying it to Ms. Martel so that she could use it at her discretion.
[10] For these reasons,
only the amount of $3,250 could be deducted as support in computing the
Appellant's income for the 2003 taxation year in accordance with paragraph 60(b)
of the Act.
Signed at Bromont, Quebec, this
22nd day of January 2007.
"Paul Bédard"
Translation certified true
on this 26th day of February
2008.
Susan Deichert, Reviser
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