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Posts from the ‘Tax Implications’ Category

I am the recipient of the Universal Child Care Benefit. Is this taxable income?

If one parent has sole custody of the child(ren), then the Universal Child Care Benefit (UCCB) will be paid to that parent. Under shared custody, you can apply to split the payment equally between the two of you.

As a general rule, the Canada Revenue Agency (CRA) considers payments received under the Universal Child Care Benefit (UCCB) to be taxable income. If you were a single parent on December 31, 2017, you may choose one of the following options:

  • Report the UCCB income as income of an eligible dependant;
  • If there is no... MORE »

Am I free to claim personal tax credits and deductions in the same way as I did when I was married?

A change in your marital status will require some planning and coordination between you and your former spouse where claiming personal tax credits and deductions for your dependent children are concerned. For example, only one spouse is entitled to claim a deduction for an eligible dependant. If you have at least two eligible dependants, you and your former spouse may claim the deduction for only one eligible dependant. If you have only one eligible dependant, you and your former spouse will have to agree on who will claim the deduction.

Another... MORE »

Will my Canada Pension Plan be affected by my divorce?

Married and common-law spouses who cohabited for at least 12 months may apply for equal division of Canada Pension Plan (CPP) credits upon being granted a divorce or legal annulment. CPP credits accumulated during each year of cohabitation will be combined and split equally between spouses. Credits can be divided even if one spouse did not make contributions to the CPP.

Either you or your former spouse can request the CPP credit split. Your lawyer may also make the request on your behalf, provided at least one spouse signs the MORE »

I have to transfer assets to my spouse as part of our Separation Agreement. Will the transfer trigger immediate income tax consequences for me?

Whether property can be transferred to your spouse without triggering immediate income tax liability depends on the type of property being transferred. In most cases, property can be transferred between spouses on a rollover basis, meaning no gains or losses arise, and the recipient receives the property at the transferor’s costs for income tax purposes, assuming both spouses are Canadian residents.

Some examples of assets which can be transferred on a rollover basis are: Registered Retirement Savings Plan (RRSPs); Tax-Free Savings Accounts (TFSAs); and, other forms of capital property. Note, in... MORE »

When am I considered not “married” for income tax purposes?

For income tax purposes, you are no longer “married” if you and your spouse have been living separate and apart for a period of 90 days or longer. The stage of your legal separation or divorce proceeding in which you are in does not matter, provided the 90 days’ separation is met.

The Canada Revenue Agency (CRA) requires you to update your marital status as soon as the 90 days has passed since you began living separate and apart from your spouse. You may update your marital status online, over the... MORE »