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.
DATE MAY 28 1990
TO ST. CATHERINES DISTRICT OFFICE FROM Specialty Rulings
' DE Directorate
D. Doney J.D. Jones
Public Affairs Manager (613) 957-2104
SUBJECT: Support and Custody Agreement FILE 7-4819
OBJET: DOSSIER
This is in reply to your memorandum of March 16, 1990, wherein you requested our opinion on whether payments made under a paternity agreement or a separation agreement entered into pursuant to the Family Law Act, 1986 of the Province of Ontario would be deductible from income by the payor by virtue of paragraph 60(c.1) of the Income Tax Act (the "Act") and required to be included in the income of the recipient by virtue of paragraph 56(1)(c.1) of the Act.
Attached to your memorandum was a letter from the requesting our
opinion on whether one of the above-noted agreements when filed with the
Provincial Court (Family Division) pursuant to section 35 of the Family
Law Act, 1986 would be sufficient such that the party to the agreement
who is required to make payments thereunder would be eligible for a
deduction from income pursuant to paragraph 60(c.1) of the Act.
As indicated to you in our previous memorandum of January 18, 1990, it is our view that the amounts paid pursuant to the paternity agreement would be maintenance payments deductible from income by the payor by virtue of paragraph 60(c.1) of the Act provided the paternity agreement is subsequently incorporated in a court order and further provided that at the time the payments were made and throughout the remainder of the year the taxpayer making the payments was living apart from the recipient.
We note that section 35 of the Family Law Act, 1986 states, in part, "(1) A person who is a party to a domestic contract or paternity agreement may file the contract or agreement with the clerk of the Provincial Court (Family Division) ... together with the person's affidavit stating that the contract or agreement is in effect and has not been set aside or varied by a court or agreement.
(2) A provision for support or maintenance contained in a contract or agreement that is filed in this manner,
- (a) may be enforced; and
- (b) may be varied under section 37 and increased under section 38, as if it were an order of the court where it is filed".
It is our view that section 35 indicates that an agreement filed with the clerk of the court in this manner has the force of an order of the court where it is filed but is not itself an order of the court and, accordingly, it is our view that such an agreement filed in this manner would not satisfy the provisions of either paragraphs 60(c.1) or 56(1)(c.1) of the Act. As a consequence, the payor of such an agreement would not satisfy the provisions of either paragraphs 60(c.1) or 56(1)(c.1) of the Act. As a consequence, the payor of such an agreement would not be entitled to a deduction from income for amounts paid pursuant to the agreement nor would a recipient be required to include such amounts in income.
We trust our comments are of assistance to you in responding to the taxpayer.
for Director
Business and General Division
Specialty Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
- c. c. Mr. R. Roy Taxation Programs Branch
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© Her Majesty the Queen in Right of Canada, 1990
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© Sa Majesté la Reine du Chef du Canada, 1990
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