Words and Phrases - "written separation agreement"

The taxpayer`s relationship with her husband broke down in 2007, and in August 2007, her husband took the initiative to prepare in mangled English a written separation agreement that provided that he would transfer his 1/2 co-ownership interest in various of their co-owned properties in satisfaction of his support obligations. For more than a year thereafter he spent much of his time in the basement of their house, in order to ease the transition for their two children (one of them, autistic), in addition to staying with friends and his own family. In May 2008, the taxpayer arranged for the ½ co-ownership interests to be transferred to her. In March 2011, she obtained a divorce decree that confirmed the previous transfer of such properties to her in settlement of her support claims.

In finding that the equivalent of ITA s. 160(4) deemed the properties to have been transferred to the taxpayer for nil consideration, Dortélus J first found that the agreement drafted by the taxpayer’s husband qualified as a “written separation agreement,” even though it was not signed by the taxpayer, given that she had accepted it and they had acted upon it, with its essential terms being confirmed by the divorce judgment. He also found that from August on they had lived “separate and apart” notwithstanding the maintaining by him of a “pied à terre” in the basement for some time.