Common Law

I have a female client who has been in a conjugal relationship with a man for the last ten years. The man is a non resident, has no Canadian source income but spends about 8 months each year living with her in Canada. The other 4 months each year is spent in his home country. He has visitor immigration status. She has never declared herself as common law on any of her last 10 tax returns. Should she have been declaring herself as common law after the first year this relationship started? Or has she never been common law?

If you can verify those facts, they appear to potentially EACH be liable for back-taxes/benefit repayments on world-wide income for the past 9 years plus.

Also, if you can verify those facts, she appears to have been less than honest/forthcoming to CRA for many years. Is there evidence that CRA has been previously informed (IN FULL) of all of her living arrangements?

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My question remains: Should they be deemed common-law partners or not for income tax purposes?

I would ask Revenue Canada as a generic question.

This one isn’t straight forward, since he is here on a visitor’s visa (usually good for 6 months at a time). For a start, you’ll need information about the couple’s social activities (separate or together, “church”, memberships, family occasions, etc), banking (any joint accounts or whether he has a bank account here), who’s name is on the lease/property or are they living at her relatives? Also, what takes him back to his home country for 4 months of the year and does she go with him? (if not, why?)

Thinking out loud but could spending 8 months a year in Canada (ie the 183 day rule) possibly make him a deemed resident of Canada? It’s quite possible depending on whether or not Canada has a treaty with his (4 month per year) country of residence.

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Agree - this one’s a bit of a rat’s nest. Possibly if NOT a deemed resident also potentially NOT a spouse … but my personal tendency is to suspect positively on both: likely deemed resident and spouse. Would depend on the fact situation and that must be pretty clearly understood (and documented if possible), especially if trying to get out of both.


@smallbizguy @snoplowguy
“spends about 8 months each year living with her in Canada.”

That strongly suggests that his “home for tax purposes” has been Canada for 9 plus years, and he may well be on the hook for 10 years back-taxes on world-wide income. Apparently the male has not produced copies of his (foreign country) tax filings/assessments, or any evidence of his tax residency elsewhere.
(Also potentially could be issues with a “visitors visa” violation?)

Regarding the female, she may be on the hook for repaying certain income-tested Benefits/Credits etc for the past 9 plus years if claimed and if based on the “single” family income.

So certainly some potential downsides and messiness.

Why not have them visit their lawyer, and come back to you when they can give you written documentation sworn/executed/witnessed by their lawyer?

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Here is more I have found out with respect to my initial post:

  1. Canada has a tax treaty with Israel (like it does with most countries).
  2. His immigration status is VISITOR.
  3. His visits to Canada year over year are greater than 183 days.
  4. There is a tax treaty between Canada and Israel.
  5. Because he sojourned more than 183 days he is a resident of Canada.
  6. However because of the tax treaty is also considered a resident of Israel.
  7. Because of this he is therefore considered under the ITA to be a DEEMED NON-RESIDENT of Canada.
  8. According to the ITA the same rules apply to him as to a NON-RESIDENT (including the way he completes his tax return).
  9. As a result he is required to file a Canadian tax return only if he has Canadian source income.
  10. He does not have any Canadian source income.
  11. It is likely she should show him as her common law partner on her tax return. However she does not qualify for HST or other benefits whether she shows him common law or not.

If he wants to he can get a written opinion from CRA on his residency status by completing the form NR74. It would be reassuring to do this form to see if CRA’s opinion agrees with mine.

However, he has his home and his spouse in Canada.
Therefore he would have lost his TAX reidency in Israel a long time ago. Does the Israeli tax department know that he is living in Canada as his ordinary place of residence?

I would also be curious about how he is supporting himself? Independently wealthy? Undeclared income?

And after 10 whole years they ought to generally have been able to make up their minds whether they are going to tie the knot or break up? What is the motivation for trying to keep it hidden and under wraps?

The maximum stay under his visitor’s visa is 180 days per entry, and expires after 5 years.

If he fills in the nr74 with the same nonsense of being on temporary vacation in Canada, it won’t turn out to be very reliable. …

Regarding Family Law issues, I wonder if she has awareness of the implications regarding property absent an agreement in the event of a breakup?

Thanks for your comments.

I am now advising him to seek legal counsel with a tax lawyer. The tax lawyer can assist him in the completion of NR74 making sure he has all the relevant facts and supporting documentation. I am not spending any more time on this until I see a written opinion from CRA regarding his residency status.