Principal Issues: [TaxInterpretations translation] Does the condition in subparagraph 122.6(e)(ii) of the Income Tax Act, in the definition of eligible individual, with respect to the requirement to have been "resident in Canada throughout the 18 month period preceding that time” refer to the concept of residence for tax purposes?
Position: No.
Reasons: The expression “was resident in Canada throughout the 18 month period preceding that time” in subparagraph 122.6(e)(ii) in the definition of "eligible individual" means that the individual must have been physically resident in Canada for the last 18 months. The concept of residence in Canada for the purposes of the Income Tax Act is provided for in paragraph 122.6(c) of the definition "eligible individual".
XXXXXXXXXX 2010-038695 Lucie Allaire, Advocate, CGA, D. Fisc
January 5, 2011
Subject: Interpretation of the definition of "eligible individual" in section 122.6 of the Income Tax Act
This memorandum is in response to your November 12, 2010 email requesting our comments on the phrase “was resident in Canada throughout the 18 month period preceding that time” found in subparagraph 122.6(e)(ii) of the definition of "eligible individual" for purposes of the Canada Child Tax Benefit ("CCTB").
Unless otherwise indicated, all legislative references herein are to the provisions of the Income Tax Act (the "Act").
In particular, you wish to know if this expression refers to the tax concept of residence.
Our Comments
Under subsection 122.61(1), the calculation of the amount of the CCTB is based on a refund of a notional overpayment of tax, which is deemed to occur in a month where the person to whom the CCTB is payable is, at the beginning of the month, an eligible individual.
For the purposes of the CCTB, the definition of "eligible individual" in section 122.6 sets out a number of conditions that must be satisfied by an individual at a particular time, including the following:
(a) resides with the qualified dependant,
[…]
(c) is resident in Canada or, where the person is the cohabiting spouse or common-law partner of a person who is deemed under subsection 250(1) to be resident in Canada throughout the taxation year that includes that time, was resident in Canada in any preceding taxation year,
[…]
(e) is, or whose cohabiting spouse or common-law partner is, a Canadian citizen or a person who
(i) is a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act,
(ii) is a temporary resident within the meaning of the Immigration and Refugee Protection Act, who was resident in Canada throughout the 18 month period preceding that time, or
(iii) is a protected person within the meaning of the Immigration and Refugee Protection Act,
(iv) was determined before that time to be a member of a class defined in the Humanitarian Designated Classes Regulations made under the Immigration Act,
[…]
To qualify as an eligible individual for CCTB purposes, the condition in paragraph (a) means that the individual must live with the dependant. In addition, the condition in paragraph (c) means that the individual must be a resident of Canada for the purposes of the Act.
However, if the mother or father of a qualified dependant is a temporary resident by virtue of the Immigration and Refugee Protection Act, he or she may become an eligible individual after 18 months of residence in Canada.
In this regard, it is our view that the condition in subparagraph 122.6(e)(ii) does not refer to residency in Canada for the purposes of the Act. The individual or the individual's spouse or common-law partner must be, according to the Immigration and Refugee Protection Act, a temporary resident who has resided in Canada for the last 18 months and who holds a permit in good standing on the 19th month, that is, a permit other than one that is marked "does not confer status" or "does not confer temporary resident status".
In addition, an individual is required to complete Schedule RC66SCH, Status in Canada and Income Information, and attach it to Form RC66, Canada Child Benefits Application, if he or she or his or her spouse or common-law partner is a temporary resident who has lived in Canada for the previous 18 months.
Access to Information
For your information, unless exempted, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Revenue Agency's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should the taxpayer request a copy of this memorandum, they may request a severed copy using the Privacy Act criteria, which does not remove taxpayer identity. Requests for this latter version should be made by you to Ms. Celine Charbonneau at (613) 957-2137.
We hope that these comments are of assistance.
François Bordeleau, Advocate
Manager
Business and Partnerships Section
Income Tax Rulings Directorate.