[OFFICIAL ENGLISH TRANSLATION]
Date: 20011029
Docket: 2000-3111(IT)I
BETWEEN:
RICARDO BENEDICTO,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
(Delivered orally from the bench
on July 31, 2001, at Montréal, Quebec,
and edited for greater clarity.)
Archambault, J.T.C.C.
[1] Ricardo Benedicto is challenging
an assessment made by the Minister of National Revenue (the
Minister) in respect of the 1998 taxation year. In
computing Mr. Benedicto's tax, the Minister disallowed the
tax credit for a wholly dependent person (equivalent-to-spouse
amount). To be entitled to this credit, all the conditions
set out in paragraph 118(1)(b) of the Income Tax
Act (the Act) must be met. Among those conditions are
the ones found in subparagraph (ii):
(ii) whether alone or jointly with one or more other persons,
maintains a self-contained domestic establishment (in which the
individual lives) and actually supports in that establishment a
person who, at that time, is
(A) except in the case of
a child of the individual, resident in Canada,
(B) wholly dependent for
support on the individual, or the individual and the other person
or persons, as the case may be,
. . .
A number of reasons were put forward by the Minister in
support of his assessment, including the fact that
Rachèle, the child of his in respect of whom Mr. Benedicto
claimed the equivalent-to-married credit, was not wholly
dependent on him for support.
Facts
[2] The following facts set out in
paragraph 5 of the Reply to the Notice of Appeal, on which the
Minister relied in making his assessment, were all admitted by
Mr. Benedicto:
[TRANSLATION]
In making and confirming the reassessment at issue, the
Minister assumed, inter alia, the following facts:
(a) two children
were born of the union of the appellant and Isabelle Laniel
(hereinafter his "former spouse"), namely
Rachèle and Frédérique;
(b) for the 1998
taxation year, the appellant claimed, in respect of his daughter
Rachèle, born on February 2, 1995, the amount of $5,380 as
the equivalent-to-married amount;
(c) at all
material times, Rachèle and Frédérique were
minor children;
(d) in her motion
for the determination of support, the applicant, that is, the
appellant's former spouse, asked the Court: [TRANSLATION]
"to fix the amount of support for the 2 minor children,
Rachèle and Frédérique, in accordance with
the rules respecting the determination of child support payments
adopted under the Code of Civil Procedure";
(e) following the
motion for the determination of support and for shared custody of
the children, a consent was signed by the appellant and his
former spouse and approved by the Superior Court on March 26,
1998;
(f) the
Superior Court judgment granted custody of Rachèle and
Frédérique to their mother and gave the appellant
access rights in respect of the said children;
(g) paragraph 5 of
that judgment states that [TRANSLATION] "for tax purposes,
the children, Rachèle and Frédérique, will
be the respondent-petitioner's dependants for 1997 and
1998", the respondent-petitioner being in this case the
appellant;
(h) paragraph
6 of the judgement reads as follows: [TRANSLATION] "The
respondent-petitioner undertakes to pay support of $4,641.20 per
year, that is, $386.76 per month, to the applicant-respondent, in
accordance with the Act, beginning on May 1, 1998," the
applicant-respondent being in this case the appellant's former
spouse;
(i) in his
income tax return for the 1998 taxation year, the appellant
claimed no deduction for support;
(j) the
appellant claimed child care expenses of $660 for his two
children, Rachèle and Frédérique, and this
claim was allowed for the year at issue.
[3] The evidence adduced at the
hearing also disclosed that Mr. Benedicto lived only briefly with
Ms. Laniel, between December 1994 and April 1995. A month after
he began to see Ms. Laniel, she became pregnant and subsequently
gave birth to twin girls on February 2, 1995. Beginning on July
1, 1995, Mr. Benedicto ended all cohabitation with Ms. Laniel and
agreed to have his two children as well as the younger of the
other two children, that Ms. Laniel had had from an earlier
relationship, live with him.
[4] On March 26, 1998, an agreement
between Mr. Benedicto and Ms. Laniel was approved by the
Superior Court of Quebec. Under this agreement, Mr. Benedicto was
to pay support of $4,641 per year to meet the needs of his two
children and this support was to be indexed. The agreement
provided that Ms. Laniel would have custody of the two children,
while recognizing that, for tax purposes, these children were to
be considered Mr. Benedicto's dependants for 1997 and 1998.
[5] The evidence also revealed that in
1998 the twins generally visited their father every weekend and
that he provided for them during those visits in addition to
making the support payments to their mother.
[6] During 1998, Mr. Benedicto did not
resume his cohabitation with Ms. Laniel.
Analysis
[7] The main reason why I must dismiss
Mr. Benedicto's appeal is essentially that he did not meet the
condition set out in clause 118(1)(b)(ii)(B) of the Act.
Rachèle, in respect of whom he deducted the
equivalent-to-married tax credit was not a child who was wholly
dependent on him for support. In my opinion, Rachèle was
also dependent on her mother for support, since she lived with
her mother during the week, and it is reasonable to believe that
the support payment of approximately $390 per month[1] received for the twins
was not sufficient to meet all of the support needs of
Rachèle and her sister. Consequently, it cannot be
concluded that Rachèle was "wholly dependent for
support" on Mr. Benedicto. Since Ms. Laniel did not
live in the same domestic establishment as Mr. Benedicto, it
cannot be concluded either that Rachèle was wholly
dependent for support on "the individual and the other
person or persons"[2] as provided in clause 118(1)(b)(ii)(B) of
the Act.
[8] For these reasons, the appeal of
Mr. Benedicto for the 1998 taxation year is dismissed,
without costs.
Signed at Montréal, Quebec, this 29th day of October
2001.
J.T.C.C.
Translation certified true
on this 26th day of February 2003.
Erich Klein, Revisor
Email this Content