TORONTO IMPUTED INCOME FAMILY LAWYER
We devote a significant area of our family law practice to the realm of complex income calculation and defence for the purpose of child and spousal support. The Child Support Guidelines prescribe a method to determine a payor’s income. Generally income for support purposes is simply determined by the payor’s tax return and adjusted in accordance with the Child Support Guidelines.
We handle many situations, however, where either party may seek to establish a different income amount for support purposes, situations where the payor has sources of income other than traditional employment income. These individuals may have corporations, stock options, rental property and other sources of non-realized investment income.
We handle and defend a range of complex family tax and imputed income applications. We frequently defend allegations where the payor’s income is alleged to be significantly higher than provided on income tax returns.
What if my income is over $150,000?
The court has the discretion to depart from the presumptive Child Support Tables where the payor has income over $150,000 per year. Courts generally don’t deviate from the Child Support Table amounts and have ordered Table support as high as $11,173 per month for a four-year-old child.
What is imputing income?
Sometimes, the court may impute income to a parent in a number of situations some of which include intentional under-employment; exemption from payment of income tax; payment of tax at an effective rate lower than that in Canada; diversion of income; the parent’s failure to reasonably utilize property to generate income; the parent’s failure to make proper financial disclosure; a situation in which a significant portion of income is paid from dividends or capital gains; or the parent’s unreasonable deduction of expenses from income, reasonableness not being solely governed by the standard applied in the Income Tax Act.
What are unreasonable deductions and expenses?
The Child Support Guidelines provides that a court may impute income to a spouse who unreasonably deducts expenses from income. The determination of the reasonableness of the expense is not solely governed by whether it is permitted under the Income Tax Act. Generally, expenses claimed from which the payor parent derives a personal benefit will be added back into his or her income, where the expenses were not reasonably necessary to earn income in the context of the objectives outlined in s.1 of the Guidelines.
What about deducting business expenses?
Income may be imputed where a significant portion of untaxed business income is used for payment of personal expenses such as vehicle, phone and food and beverage expenses.
We handle and defend a range of complex business, tax and income calculation disputes, often working closely with forensic accountants.