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David Rotfleisch on Why is the Canada Revenue Agency (CRA) Monitoring Your Bedroom? For Tax Purposes of Common-law Marriage?

posted 1 year ago

Your bedroom is monitored by CRA! A common-law marriage is an informal union that does not demand the formality of a statutory marriage. Also, a common-law marriage relationship is a reality that is established after considering a multitude of factors and the circumstances of the parties. This suggests that a common-law marriage relationship could exist even without the knowledge of the involved parties. Although the specifics differ by province, a common-law marriage relationship carries some of the rights and obligations of a legal marriage. Common law partners are treated the same as married couples for tax purposes under the Canadian Income Tax Act. The Income Tax Act no longer distinguishes between same-sex and opposite-sex couples; prior to 2001, the definition of spouse was expanded to include opposite-sex common-law couples. However, that definition was removed by the same-sex partners bill of 2000, which also added the definition of common-law partner to include both same-sex and opposite-sex couples.

Definition of a Common Law Partner

A Canadian taxpayer must be cohabiting with another person in a conjugal relationship to be considered common-law partners for tax purposes. Or, they must both be parents of the same child or have lived together for the past 12 months. In other words, regardless of the length of their cohabitation, a cohabiting couple who are in a conjugal relationship and have a child together immediately qualify as common-law the existence of a conjugal relationship cannot be determined with absolute certainty. Instead, in M v. H, the Supreme Court of Canada recognized seven essential elements to define a conjugal relationship: 1) shelter; 2) sexual and personal behaviour; 3) services; 4) social; 5) societal; 6) support; and 7) children. The relationship leans toward being conjugal when the parties shared a home, slept in the same bed or room, and had no other or fewer roommates.

A conjugal relationship is demonstrated by the parties’ sexual and personal behaviour, such as when they have sex, remain faithful to one another, talk about their difficulties, have meals together, help one another when they are having issues or are unwell, and exchange gifts on special occasions. When considering the parties’ behaviour and habits for services, consideration is given to how they prepare meals, wash and clean their clothes, shop, maintain their home, and perform other domestic tasks.

The more frequently these tasks are performed communally, the more likely it is that the parties are in a conjugal relationship. The relationship leans toward conjugal in terms of the social factor, where the parties engage in community activities together, respect each other’s family members as a couple would, and are treated as members of each other’s families. The societal element considers how the parties are treated by the community and if they are treated as a couple.

The support factor examines the parties’ financial relationships, including whether they share income for basic needs like food, shelter, and clothing as well as their plans for buying and owning property. The more finances the partners share and mix, the more conjugal their relationship is. The last factor, children, examines the attitudes and behaviours of the parties toward children, where having children now or in the future has a favourable effect on the conjugal nature of the relationship. Speak with our Toronto tax firm to learn more about how these factors relate to your particular situation and to receive reliable guidance.

Nonetheless, in order to qualify as a common law partnership, a couple must have lived together for the previous 12 months while being in a conjugal relationship without children. To be clear, cohabitation does not require that a couple live together daily. It simply means that they have been together for the past 12 months. Unless they live separately and apart for at least 90 continuous days due to a breakdown of their conjugal relationship, a couple is assumed to be cohabiting in a conjugal relationship every day after it is decided that they have started doing so, regardless of their actual circumstances.

Tax Pro Planning Tips for Common Law Relationship

If you meet the CRA definition of common-law spouses then you are required to file your tax returns on that basis. The tax implications of being married versus single might vary and can be both favourable and unfavourable. Being common-law partners can be advantageous since it enables one partner to claim the other as a dependent and receive additional tax credits. Common law partners, on the other hand, are only allowed to share one principal residence exemption, meaning that each person would be able to claim his or her own exemption when it comes time to sell a property. It’s crucial to remember that the parties involved did not choose to be in a common law relationship; rather, it is a fact. To put it another way, the courts can eventually decide whether or not two individuals are a couple based on their assessment of the 7 factors, regardless of whether the parties believe they are in a common law relationship. As a result, it’s essential that you are cognizant of the key factors; if in doubt, call one of our tax lawyers in Toronto when in doubt, and confirm that your relationship status is accurate.


“This article just provides broad information. It is only up to date as of the posting date. It has not been updated and may be out of date. It does not give legal advice and should not be relied on. Every tax scenario is unique to its circumstances and will differ from the instances described in the articles. If you have specific legal questions, you should seek the advice of a Canadian Tax lawyer.”


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