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Docket: 2002-3862(IT)I |
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BETWEEN: |
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SHARON LORENE ACTON, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN,
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Respondent. |
____________________________________________________________________
Appeal heard together with the appeal of Allen Grant Acton (2002-3684(IT)I) on February 7, 2003 at London, Ontario
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Before: The Honourable Judge Terrence O'Connor |
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Appearances: |
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Agent for the Appellant: |
Allen Grant Acton |
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Counsel for the Respondent: |
G. Boyd Aitken |
____________________________________________________________________
JUDGMENT
The appeal from the reassessment made under the Income Tax Act for the 1999 taxation year is dismissed.
Signed at Ottawa, Canada, this 6th day of May 2003.
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"T. O'Connor" |
J.T.C.C.
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Docket: 2002-3864(IT)I |
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BETWEEN: |
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ALLEN GRANT ACTON, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN,
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Respondent. |
____________________________________________________________________
Appeal heard together with the appeal of Sharon Lorene Acton (2002-3682(IT)I) on February 7, 2003 at London, Ontario
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Before: The Honourable Judge Terrence O'Connor |
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Appearances: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
G. Boyd Aitken |
____________________________________________________________________
JUDGMENT
The appeal from the reassessment made under the Income Tax Act for the 1999 taxation year is dismissed.
Signed at Ottawa, Canada this 6th day of May 2003.
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"T. O'Connor" |
J.T.C.C.
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Citation:2003TCC224 |
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Date: 20030506 |
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Docket: 2002-3862(IT)I |
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BETWEEN: |
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SHARON LORENE ACTON, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN,
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Docket: 2002-3864(IT)I |
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AND BETWEEN: |
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ALLEN GRANT ACTON, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN,
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Respondent. |
____________________________________________________________________
REASONS FOR JUDGMENT
O'Connor, J.T.C.C.
[1] These appeals were heard together on February 7, 2003 at London, Ontario. In the appeal of Allen Grant Acton since the assessment was a nil assessment and since there can be no appeal from a nil assessment that appeal was dismissed from the bench and that dismissal is confirmed.
[2] In the appeal of Sharon Lorene Acton the Minister of National Revenue (the "Minister") had for the 1999 taxation year disallowed her claim for the equivalent-to-spouse amount in the calculation of non-refundable tax credits. The Appellant had claimed an amount of $5,718 as the equivalent to spouse amount in respect of her husband Allen Grant Acton. Based on the assumptions of the Minister in the Reply to the Notice of Appeal and the evidence submitted in the 1999 taxation year Sharon Lorene Acton and Allen Grant Acton lived together in a self-contained domestic establishment maintained by them.
[3] Further, in the 1999 taxation year Allen Grant Acton, according to the Minister, earned income in his capacity as trustee of the estate of his late father. Allen Grant Acton contests this stating that although the lawyer assisting him in handling the estate categorized the payment to him as a trustee's fee nevertheless, this was not correct as it should have been categorized as part of his inheritance which would not be income and therefore not be subject to income tax nor operate to affect his wife's claim for a non-refundable tax credit.
[4] Paragraphs 118(1)(a) and 118(1)(b) of the Income Tax Act (the "Act") provide as follows:
SECTION 118: Personal Credits
(1) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount determined by the formula
A X B
where
A is the appropriate percentage for the year, and
B is the total of,
118(1)(a)
(a) Married status - in the case of an individual who at any time in the year is a married person who supports the individual's spouse and is not living separate and apart from the spouse by reason of a breakdown of their marriage, an amount equal to the total of
(i) $6,000, and
(ii) an amount determined by the formula
$5,000 - (C - $500)
where
C is the greater of $500 and the income of the individual's spouse for the year or, where the individual and the individual's spouse are living separate and apart at the end of the year by reason of a breakdown of their marriage, the spouse's income for the year while married and not so separated,
118(1)(b)
(b) Wholly dependent person - in the case of an individual who does not claim a deduction for the year because of paragraph (a) and who, at any time in the year,
(i) is an unmarried person or a married person who neither supported nor lived with the married person's spouse and is not supported by the spouse, and
(ii) whether alone or jointly with one or more other persons, maintains a self-contained domestic establishment (in which the individual lives) and actually supports in that establishment a person who, at that time, is
(A) except in the case of a child of the individual, resident in Canada,
(B) wholly dependent for support on the individual, or the individual and the other person or persons, as the case may be,
(C) related to the individual, and
(D) except in the case of a parent or grandparent of the individual, either under 18 years of age or so dependent by reason of mental or physical infirmity,
an amount equal to the total of
(iii) $6,000, and
(iv) an amount determined by the formula
$5,000 - (D - $500)
D is the greater of $500 and the income for the year of the dependent person.
[5] In the 1999 taxation year Sharon Lorene Acton was married to Allen Grant Acton and they lived together in a self-contained establishment maintained by them.
[6] Moreover, the net income of Allen Grant Acton in 1999 was $6,410 and in my opinion although Allen Grant Acton maintains that that amount should not be characterized as income or trustee's fees that is how it was dealt with and paid and consequently that is how the amount should be characterized.
[7] It is not entirely clear whether Sharon Lorene Acton seeks to apply the credit in paragraph 118(1)(a) or paragraph 118(1)(b). The Reply however refers to paragraph 118(1)(b). In my opinion neither credit was available because the income of Allen Grant Acton in 1999 exceeded $6,290. Moreover, since Allen Grant Acton lived with the Appellant in the 1999 taxation year in a self-contained domestic establishment maintained by them, the equivalent to spouse amount was properly disallowed within the provisions of paragraph 118(1)(b) of the Act.
[8] Consequently for all of the above reasons Sharon Lorene Acton was not entitled to claim the spousal amount nor the equivalent-to-spouse amount in the 1999 taxation year.
[9] Consequently her appeal is dismissed.
Signed at Ottawa, Canada this 6th day of May 2003.
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"T. O'Connor" |
J.T.C.C.
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CITATION: |
2003TCC224 |
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COURT FILE NOS.: |
2002-3862(IT)I 2002-3864(IT)I |
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STYLE OF CAUSE: |
Sharon Lorene Acton v. The Queen Allen Grant Acton v. The Queen |
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PLACE OF HEARING: |
London, Ontario |
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DATE OF HEARING: |
February 7, 2003 |
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REASONS FOR JUDGMENT BY: |
The Honourable Judge T. O'Connor |
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DATE OF JUDGMENT: |
May 6, 2003 |
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APPEARANCES: |
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For the Appellants: |
Allen Grant Acton |
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Counsel for the Respondent: |
G. Boyd Aitken |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |