Spousal support orders help share the financial effects of a relationship (whether married or common law). This type of support seeks to fairly balance the relationship’s impact on the income generating capacity of the partners.
The basis of spousal support can be:
The amount of support depends on relative incomes of the parties as well as the circumstances of a particular case. The duration of support will depend on other factors. These may include the length of the relationship, and whether a party will continue to suffer reduced income generating capacity. Often this might arise from age at separation, child care responsibilities, or other factors.
Spousal support may take the form of periodic payments or a lump sum. Each option has different tax consequences for both parties. Generally, the payor will deduct monthly payments from his/her income and the recipient will include them. When paid as a lump sum, the payment will generally not be tax deductible to the payor or taxable to the recipient. There may be other ways to optimize tax treatment depending on the individual case.
Please contact us if you are interested in learning more about support.