It is becoming more common for separated couples to remain at the same address while they work through the details of their separation or divorce. Typically they do not have the financial resources to maintain two households. In many cases, the couples divide the house to accommodate the new living arrangement.
One of the challenges with this type of arrangement is convincing the Canada Revenue Agency that you are no longer living in a conjugal relationship, even though the address has remained the same. Since benefits like the Canada Child Tax Benefit and GST/HST will most likely increase when a couple separates, there are reasons for the CRA to ensure the situation is being reported accurately.
If you find yourself in this kind of situation, here are some questions the tax court has asked to settle the issue when couples claim separated while living at the same residence:
- Do you have separate bedrooms?
- Is there an absence of sexual relations?
- Does the couple communicate?
- Do they do domestic activities for each other?
- Do they eat their meals separately?
- Do they engage in social activities together?
For couples with existing separation agreements, answering these questions may be enough to show a breakdown of the relationship. If you find yourself living in the same space as your separated spouse, you should agree how you will claim your status. If one files married and the other separated, the CRA will review the returns.
And be ready to have the CRA request additional information to prove your new status. A letter from a third party, such as a teacher or pastor, would usually be sufficient. Claiming to be separated while living at the same address is likely to draw attention, but as long as you can show the situation is real the CRA should accept the status change.