When is a spouse’s income from a corporation divided between family and business purposes?
British Columbia, Canada
The following excerpt is from K.W. v. L.H., 2018 BCCA 204 (CanLII):
When applying s. 18, the court must assess the fairness of a spouse’s allocation of pre-tax corporation income between business and family purposes, applying the test of an objective, well-informed parent in the same circumstances having regard to the objectives of the Guidelines: Kowalewich v. Kowalewich, 2001 BCCA 450 at paras. 44–45. As a general rule, monies needed to maintain the value of a business as a viable going concern will not be available for support purposes and should not be included in determining annual income: Kowalewich at para. 58.
The onus is on the payor to provide evidence that a corporation’s pre-tax income is not available to the payor: Hausmann v. Klukas, 2009 BCCA 32 at paras. 50–52, leave to appeal ref’d [2009] SCCA No. 135.
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