Separation and divorce

Unfortunately, a marriage or common-law relationship breakdown (which we’ll refer to in this bulletin as “separation or divorce”) is something that you may have to deal with at some time. And, with such a life changing event, there are many things to think about – tax implications being one of them.

This bulletin examines some of the issues you may be concerned with, or have questions about, when you become separated or divorced.

As easy as it may seem, the definition of “separation” or “divorce” can be quite complicated at times because the definition of a “spouse” and “common-law partner” are each complex and have undergone changes in the last two decades and more significant refinement in recent years.

Generally speaking, for income tax purposes the term “spouse” means an individual who’s gone through a form of marriage (whether valid or possibly invalid) with another individual. Such individuals may be of the same or opposite sex.

Since 2000 (due to changes in the law dealing with same-sex partners), the Income Tax Act has included the term “common-law partner” wherever the term spouse is used. An individual becomes the common-law partner of another individual when the individuals have cohabitated in a conjugal relationship for at least 12 months (unless separated for at least 90 days at the particular time).

Since 2005, the term common-law partner contains no reference (nor does the term “spouse”) to the sex of the individuals (due to changes in the law dealing with same-sex marriages). Therefore, both the terms “spouse” and “common-law partner” encompass persons of the same or opposite sex.