We are writing in reply to your letter of May 2, 1991, wherein you requested our views on the income tax implications of the splitting of pension income on marriage breakdown, with respect to the following situation.
24(1)
In this regard, you have requested our views as to whether considering the pension income as assets in the agreement in any way alters the income tax treatment for either spouse.
Our Comments
It is our view that the clause in the agreement does not alter the fact that the spouses each have a proprietary interest in one-half of the pension benefits. As a consequence, each spouse would be required to report their respective share of the pension benefit as income under subparagraph 56(1)(a)(i) of the Income Tax Act in each and every year of receipt.
We trust our comments will be of assistance to you.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch