Distributions of Income under a Legal Obligation
11.45. A husband has an obligation imposed under the general law to maintain his wife, and a father has a similar obligation in respect of his infant children. Such obligations are presently the subject of certain relief in the nature of concessional deductions from assessable income (see section 82B) and are discussed elsewhere in this report. No question of income-splitting arises in connection with payments made in discharge of these obligations. In certain circumstances a husband may transfer a right to receive income from property or income-producing property itself to his wife or to his former wife pursuant to the order of a Court, in which case the income would be taxable in the hands of the wife and would not be exempt income under section 23 (1). Section 102B (4) exempts the transfer by a husband or former husband of a right to receive income from property for the purpose of alimony or maintenance from the alienation of income provisions of section 102B, whether made in compliance with a Court order or not, and the income in question is not taxable as income of the husband. The Committee is of the opinion that, where the right to receive income or income-producing property is, by virtue of a Court order, transferred to a wife or former wife or to the children or to a trustee for her or the children, by the husband or father, the measures against income-splitting in this chapter should not apply.