19 July 1999 External T.I. 9913605 - GENERAL PERSONAL TAX QUESTIONS

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Whether individual 1) can transfer pension to spouse or children, 2) is required to make installment payments, and 3) can claim any amount for his adult son who lives with him.

Position: Pension cannot be transferred; referred him to installment guide; son can only be claimed if infirm, and he may be entitled to portion of tuition and education amount

Reasons: General information available in guides

XXXXXXXXXX  	Wayne Antle
		5-991360
July 19, 1999

Dear XXXXXXXXXX:

We are writing in response to your letter dated May 4, 1999 in which you ask for our reply to several questions. We will address each question below.

1. Can you transfer your pension to your spouse in order to reduce your tax payable?

Payments received out of a pension or superannuation plan, including the Canada Pension Plan, must be reported by the person receiving the payments in the year they are received. There is no provision allowing these payments to be transferred to, and reported by, your spouse or children in order to reduce your tax payable.

You may be entitled to claim the spousal tax credit for your wife if her net income was less than $5,918 in the year. Please refer to line 303 in the General Income Tax Guide for more information.

2. Are you required to pay tax by installments?

You must pay your tax by installments if in the current year, and either of the two preceding years, your net tax owing exceeded $2,000. However, you do not have to make installment payments in the first year these conditions are met. Your net tax owing is the total of your federal and provincial tax payable, less your tax deducted at source and your refundable tax credits. For more information, please refer to the pamphlet entitled “Paying Your Income Tax by Installments” available at your tax services office.

3. Can you deduct any amount for your son who lives with you, and has no income?

You may only claim a tax credit for your son if he is dependent on you by reason of mental or physical infirmity. In addition, if your son took qualifying courses in the year, he may be able to transfer his tuition and education amount to you. Please refer to lines 306, 315, and 324 in the General Tax Guide for more information.

If you require further assistance, you may visit the Toronto East Tax Services Office located at 200 Town Centre Court, Scarborough. You may also call them at 973-5150, or fax them at 973-5126.

Yours truly

R. Albert, C.A.

for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

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