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 an application to vary an order is a new order for the purposes of deductible/taxable payments and commencement date.
Position TAKEN:
An application for a new court order does not have a commencement date until it is validated by the Court. Payments made pursuant to a prior order are still treated under the old rules.
Reasons FOR POSITION TAKEN:
The application for a consent order has not yet been validated by the Court.
April 20, 1999
Vancouver Island Tax Services Office HEDQUARTERS Client Services D. Miller 957-2060 Attention: Tina Dochnel 7-990940
Deductibility of Support Payments (XXXXXXXXXX)
This is in reply to your letter of April 8, 1999, wherein you requested our opinion on the deductibility of support payments with respect to a consent order filed with the Court and dated XXXXXXXXXX. The taxpayer (XXXXXXXXX ) was disallowed a deduction for child support on the basis that the September 9th consent order was a valid court order and had a “commencement day”, as that term is defined in subsection 56.1(4) of the Income Tax Act.
Based on the documents forwarded to us, the consent order dated XXXXXXXXXX does not appear to have been validated by the Court. In other words, as no judgement appears to have been rendered, the consent order has no legal force or effect. Consequently, in our opinion, payments being made pursuant to the Court Order dated XXXXXXXXXX, would continue to be deductible.
If there are any other issues or you receive additional information that requires our assistance, please do not hesitate to contact us.
Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch