Where to start as a Transferee Taxpayer Assessed under Section 160

Abstract

“The power to tax means little without the power to collect”[1]

Where a taxpayer is the transferee of a property from a transferor who had a tax debt in the year the property was transferred, the Minister may assess the transferee under section 160 of the Act in order to recover on the tax debt owed by the transferor.

Summarily, section 160 imposes strict, joint and several liability on the transferee for the transferor’s tax debt, and is always applicable regardless of the intention of the parties.

However, as section 160 is intended to operate to assist the Minister in collecting taxes owed where collection may otherwise not be possible, an assessment under section 160 is only of concern for transferees where the transferor had an unpaid tax debt in the year the property was transferred.

This paper is to provide higher-level guidance on who section 160 applies to, when it will operate, and what liability the transferee may have.?Additionally, this paper provides jurisprudence examples in which the main categories of defences available to the transferee have been argued following the Minister’s assessment under section 160.

??????????????????????????I.?????????Introduction

While taxpayers are entitled to arrange their affairs so as to reduce their tax liability, that entitlement is subject to a number of exceptions.[2]

It has been said that purpose of section 160 of the Income Tax Act (the “Act”) is to operate so as to prevent a person from transferring property to any non-arm’s length person in order to defeat tax obligations.[3] ?Even though s. 160 has also been said to be draconian, and to have the potential for unjust results, if the section’s statutory conditions are met, the courts will support the Minister’s usage of it.[4]

Section 160 of the Act is titled: Tax liability re property transferred not at arm’s length;[5] the section lays out both the rules that apply to transfers of property captured by the section, whether occurring directly or indirectly, and to whom those rules apply.

According to s. 160, the rules contained in the section are relevant where a person has transferred property to:

(a)???the person’s spouse or common-law partner or a person who has since become the person’s spouse of common-law partner;

(b)???a person who was under 18 years of age; or

(c)???a person with whom the person was not dealing at arm’s length.[6]

Like many sections of the Act, s. 160 does not define the very thing at which it is aimed, and even though ‘arm’s length’ appears 31 times in s. 248(1), ‘arm’s length’ itself remains undefined in the definitions section.[7] ?Additionally worth noting is that s. 160(1)(a-c) includes more than just those persons who occupy the relationships as stated in s. 160(1)(a-c) at the time of the transfer by virtue of s. 74 to 75.1[8] and pursuant to s. 160(1)(d).[9]

Importantly, where a transfer of property comes within s. 160, the section always applies, regardless of intention to avoid the payment of tax.?Therefore, not knowing whether a transfer is or not properly an arm’s length transfer, could result in an unanticipated tax liability for the taxpayer who is the transferee.[10]

????????????????????????II.?????????Defining the Arm’s Length Relationship

The notion of “arm’s length” refers to the relationship that is “as far away from one as the arm can reach; away from familiarity, at a distance; without fiduciary relations”.[11]

Section 160 is not the only place in the Act where the concept of the arm’s length occurs; a number of sections in Act either refer, or pertain, to taxpayers arm’s length dealings or transactions.[12] ?Helpfully, even though ‘arm’s length’ itself is absent from the definitions section,[13] what is considered an arm’s length relationship is addressed elsewhere.?Indeed, s. 251(1) is titled: Arm’s length.?

Summarily, s. 251 says that:

·???????related persons are deemed to deal with each other not at arm’s length;

·???????based on certain relationships between taxpayers and trusts, a deeming of non-arm’s length dealing results; and

·???????in any other case, whether dealings are at arm’s length is a question of fact.?

Section 251 goes on to provide definitions of relationships that are captured by this section.?The CRA has also provided guidance on its interpretation of the arm’s length relationship in s. 251.[14]

It is well known that the Supreme Court of Canada has said that “the words of an Act are to be read in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act…”[15] ?To this end, and quite reasonably, whether an interpersonal relationship of individuals is an arm’s length relationship, does not seem to stray too far from what would be expected on the plain language and clear reading of the statute.?It should be noted however, that for the purposes of s.160(1)(b),[16] courts have said “it is not necessary that there be a non-arm’s length relationship where the transferee is a person under the age of 18.”[17] ?

Where the relationship is perhaps less obvious might be in the corporate context.?Here, the framework for the analysis, starts with determining whether: (a) there is a common mind directing the bargaining for the parties to the transaction, (b) the parties to the transaction act in concert without separate interests, and (c) one party exercises de facto control over others.[18]

Most simply put, “[p]arties are not considered to be dealing with each other at arm’s length if one person dictates the terms of the bargain on both sides of the transaction.”[19]

???????????????????????III.?????????The Operation of Section 160

While the spectre of s. 160 is always looming when transactions take place between parties dealing not at arm’s length, the section may not always operate.?It has been said that s. 160 “acts as an important collection tool because it thwarts attempts to move money or other property beyond the tax collector’s reach by placing it in presumably friendly hands.”[20] ?

When determining whether s. 160 should operate regarding a transfer of property, courts consider:[21]

1)?????whether the transferor was liable to pay tax under the Act at the time of transfer;

2)?????whether a transfer of property took place, either directly or indirectly;

3)?????if the transferee was one of the categories of person to whom s. 160 applies;[22] and

4)?????if the fair market value of the property transferred exceeded the value of the consideration given by transferee.

The effect of an assessment under, or the operation of, s. 160 on a transfer of property, is that the transferee becomes jointly and severally (or solidarily) liable for the transferor’s tax liability to the extent that the fair market value of the property transferred exceeds the consideration given by the transferee for the property.[23] ?

a.?????Liability of the Transferee

Specifically, the Act says:

(d)???the transferee and transferor are jointly and severally, or solidarily, liable to pay a part of the transferor’s tax under this Part for each taxation year equal to the amount by which the tax for the year is greater than it would have been if it were not for the operation of [certain attribution rule sections of the Act], in respect of any income from, or gain from the disposition of, the property so transferred or property substituted for it, and

(e)???the transferee and transferor are jointly and severally, or solidarily, liable to pay under this Act an amount equal to the lesser of

(i)?????the amount, if any, by which the fair market value of the property at the time it was transferred exceeds the fair market value at the time of the consideration given for the property, and

(ii)???the total of all amounts each of which is an amount that the transferor is liable to pay under this Act (…) in or in respect of the taxation year in which the property was transferred to any preceding tax year[.][24]

The implication of the operation of s. 160(1)(d-e) are that parties, who are those other than those who actually incurred the tax debt in the first place, may find themselves with a tax burden to satisfy.?The ambit of who are those persons who attract liability in accordance with s. 160(1)(a-c) to pay some or all of the transferor’s tax, are further expanded upon by the incorporation into s. 160(1)(d) of the attribution rules contained in s. 74-75.1.[25] ?

Summarily, s. 74-75.1 serves to incorporate also those persons who meet, or at some point met, the relationship definitions, as well as those who are of the foregoing and have a beneficial interest in a trust to which the property has been transferred.?To this end, the incorporation of the s. 74-75.1 attribution rules into s. 160(1)(d) serves to further prevent a taxpayer from attempting to circumvent s. 160 by way of use of a trust, or someone who does not meet the prima facie relationship definition.[26]

The Court has said that “[o]nce the conditions of subsection 160(1) are met … the transferee becomes personally liable to pay the tax determined under that subsection … and is joint and several with that of the transferor.”[27] ?Given that a taxpayer’s motivations for making the transfer of property are irrelevant to the operation of s. 160, it would seem that the conditions in s. 160(1) are not all that complicated to meet.

b.????Fair Market Value Consideration

It should be noted that the consideration provided by a transferee for a subject transaction plays an important role in s. 160(d-e).?In Logiudice v. R.,[28] the Court noted that “[t]he limiting provision in subparagraph 160(1)(e)(i) … is to protect genuine business transactions from the operation of the section, to the extent of the fair market value of the consideration given for the property transferred. … [F]or a transferee to have the benefit of this saving provision, [the transferee] must be able to prove that the transfer of property … was made pursuant to the terms of a genuine contractual arrangement.”[29]

To this end, even though parties may not be dealing at arm’s length, it is not complicated to understand how even though the transfer of property may meet the criteria so as to be captured by s. 160, that such a transfer may not result in an assessment under s. 160 if the fair market value of the consideration provided was adequate.?Along the same vein, it is also worth noting is that a taxpayer’s performance of a legal obligation does not constitute a transfer of property with the meaning of s. 160 of the Act.[30]

However, where the transfer may still be caught due to inadequate, or lack of sufficient consideration provided, there is some relief in s. 160(1)(e); for the taxpayer on which the burden is imposed, the liability is limited to the lesser of either the possible excess in fair market value over the consideration given by the transferee, or the tax debt owed by the transferor.[31]

c.?????Where the Consideration is Lacking

As just eluded to, it is where the consideration is either absent or inadequate where we find the operation of s. 160.[32] ?Moreover, while taxpayers will make decisions based on creative tax planning, without the requisite foresight of what certain transactions will yield, a tax debt is likely to arise.[33]

A case called Tétrault c. R.[34] came about following the Minister’s assessment of Ms. Tétrault for an amount which included $9,710.86 owed by her husband for six separate taxation years, and an additional $2,183.10 of interest.?In this case, Mr. Tétrault had been endorsing both his pension and annuity cheques for deposit directly into Ms. Tétrault’s bank account, and claimed to have been doing so since well before the first of the six taxation years in question.?

During the tax years in question however, Mr. Tétrault had been claiming deductions for losses sustained by the farm on which the couple had come to live, but which was said to belong to Ms. Tétrault only.?Eventually, Mr. Tétrault declared bankruptcy.?In its analysis, the Court affirmed that s.160 “may apply to a transferee of property who has no intention to assist the primary tax debtor [in avoiding] the payment of tax, [and further that s.160] may apply to a transferee who has no knowledge of the tax affairs of the primary tax debtor”.[35]

Ultimately in Tétrault, the Court concluded that the Minister’s assessment of Ms. Tétrault under s. 160 was appropriate based on the factual matrix including that, among other things, Mr. Tétrault did properly have a tax obligation for income earned, and that there were no contractual legal obligations which required any transfer of property to Ms. Tétrault.?Worth remembering is that the Act defines “property” as “any kind whatever … and … includes … money[.]”[36] ?Notwithstanding the Court’s discussion on whether domestic obligations could suffice for consideration, effectively the Court was saying that Ms. Tétrault had not provided any, or any sufficient, fair market value in consideration for the property being transferred to her.?

A taxpayer may also run afoul of subparagraph 160(1)(e)(i) where the consideration was not provided at the time of transfer.?In a case called Hardtke v. R.,[37] the transferee’s consideration for a property transferred was said to be the assumption of a mortgage on the property and $1.?The Court held that amounts paid to the transferor by the transferee not at the time of the transfer cannot be consideration for the property transferred.[38]

In light of the foregoing, where property with a net value of $0 has been moved beyond the tax collector’s reach, it is unlikely the Minister will make an assessment under s. 160.?Certainly also worth remembering is that as s. 160 is a collection tool, as opposed to a penalty provision, where a transferor does not have any tax liability during the period in which property is transferred, an assessment resulting in tax liability under s. 160 is effectively inconceivable.

d.????The Right to Collect Provincial Tax pursuant to Section 160

Importantly, the power to collect following an assessment under s. 160 is reserved for federal tax debts, and does nothing for provincial tax debts.?In a case which arose from a transfer in the mid-1980s, where the transferor received a provincial tax refund by way of a provincial rebate, and subsequently transferred portions of the rebate to a number of familial transferees in a taxation year where the transferor had a provincial tax debt, the Minister sought to recover from at least one of the transferees.[39] ?In that case, the Minister suggested that by virtue of the provincial statute’s language, s. 160 transformed a provincial tax liability into a federal tax liability; understandably, the Court had difficulty understanding this argument.?

Interestingly, the decision noted that while it was not pleaded, the transferor did have a federal tax debt as well; the Court declined to consider the federal debt owing to its absence from the pleadings.[40] ?The Court went on to note that while the Minister assesses and sends notices to residents of a province regarding both the taxpayer’s federal and provincial tax status, the Minister is to assess the tax, and notify the taxpayer, in accordance with each piece of legislation and to not conflate the two as had been done in this matter.[41]

??????????????????????IV.?????????Defences to an Assessment Made under Section 160

As noted above, the transferee may have no intention to assist the transferor in avoiding the payment of a tax obligation, or even any knowledge about the tax debt of the transferor, and yet, s. 160 will apply none the less.[42] ?However, even though s. 160 of the Act imposes absolute liability, which results in the defence of due diligence being unavailable,[43] other forms of defences are available, the most frequently pleaded of which, are covered below.

As a technical point, following an assessment, or reassessment as the case may be, a taxpayer may file a Notice of Objection on the prescribed form and in accordance with the relevant provisions of the Act; alternatively, a taxpayer can appeal directly to the Tax Court.[44]

Importantly, when the Minister assesses a transferee taxpayer under s. 160, the transferee taxpayer has the full right to challenge and defend against the assessment, including by way of an attack on the on the transferor taxpayer, being the taxpayer who incurred the tax debt for which the Minister is seeking to collect.[45]

In a case called Gaucher v. R.,[46] a taxpayer came to be liable as the transferee following the Minister’s assessment of her former husband who had previously has transferred a residence to the transferee taxpayer, and proceeded to declared bankruptcy.?The Minster subsequently assessed the transferee taxpayer in order to collect on her former husband’s tax debt.?The Court’s view was that even though the debt owed was the same, and that bankruptcy of the transferor does not extinguish the tax liability of the transferee,[47] the assessments of the transferee taxpayer and of her former husband were separate issues, and so, since the transferee was not a party to the proceedings that involved her former husband, she could not be prevented from bringing her own defence.[48]

Owing to the fact that liability under s. 160 exists regardless of negligence or intent, any defences the taxpayer may avail themselves to must be based on a fact that can be disputed.?Of course, where documentation or evidence otherwise may be lacking, a taxpayer is likely to struggle to support their version of the facts.?In the aforementioned case, Hardtke v. R.,[49] the Court found the taxpayer’s documentation and testimony to be insufficient to support the arguments advanced, and so, even though the taxpayer’s argument may have been valid, the Court concluded the tax debt was to be paid.

A taxpayer can argue that the tax debt owed is non-existent, or substantially lower that amount which the Minister seeks to recover.?In these instances, it is the Minister who must show that the tax liability of the transferor exists, and at the amount alleged by the Minister.[50] ?Certainly this defence is reasonable to consider advancing in many circumstances, as the transferee may have no knowledge of the transferor’s tax debt, much less any documentation with which to ascertain what a correct amount may be.?Importantly, and like most matters of procedure, for the defence to be available, the transferee must dispute the transferor’s tax debt in the Notice or other formal pleadings, otherwise the court will take the amount owed to be what the Minister says it is.[51]

a.?????Fair Market Value Paid

As discussed above, where fair market value consideration has been given by the transferee to the transferor for the property in question at the time of the transfer, a Minister’s assessment under s. 160 will be defeated.?

In Konyi v. The Queen,[52] the Court concluded that a valid agreement existed between husband and wife for the husband to transfer his interest in their residence to the wife for an agreed upon fair market consideration, that the transfer did occur pursuant to the agreement, and importantly, that the consideration had been paid from wife to husband for the property.?The couple had reasonably good documentation to evidence the payments and ultimately the court concluded that the wife was not jointly and severally liable with her husband for his tax debt owed.[53]

A taxpayer can also bring into question the fair market value of the property being transferred.?In a case arising from similar facts to the foregoing, where an interest in a property was transferred between persons considered to be related, the transferee taxpayer advanced that the interest in the property was effectively worth nothing on the basis that had the transferee sold the property she would have had to satisfy certain debts against the property, leaving her with $0 as a result of a sale.[54] ?In that case, the transferee taxpayer failed based on her lack of documentation and inconsistent evidence given to the Court; conceivably however, had the taxpayer been able to adduce evidence in support of her position, she may have been successful.

By contrast, in a case indexed as G.B.M. (1988) Inc v. Canada,[55] by virtue of documentation obtained in the course of the bankruptcy of a townhouse vendor, support was provided for the taxpayer’s argument that certain townhouses were worth less at fair market value than what the Minister had asserted; the taxpayer was successful in his efforts and the tax liability was reduced to a lower amount.?To this end, we can see that clear documentation is helpful to a taxpayer’s defence that fair market value of a property is of a lesser amount.?

b.????No Transfer

Going one step further, a taxpayer can assert that the transfer did not take place at all.?The term “transfer” has been defined and continuously adopted as follows:

The word “transfer” is not a term of art and has not a technical meaning.?It is not … that it should be made in any particular form or that it should be made directly.?All that is required is that the [transferor] should so deal with the property as to divest himself of it and vest it in [the transferee], that is to say, pass the property from himself to her.?The means by which he accomplishes this result, whether direct or circuitous, may properly be called a transfer.[56]

On the above, which has continued to be affirmed by modern courts, it has been held that it is the vesting of the property transferred, and whether the would be transferee could exercise personal control over the property, that is determinative of whether a transfer has taken place in fact.?Where the wife of the deceased used those funds that were deposited into her account by her late husband for the purposes of discharging his legal obligations and other personal debts, as well as to fulfil his obligation to support himself and his wife, the court found that as the property had not vested, no transfer could be said to have occurred.[57]

In Medland v. R.,[58] the issue was whether a real property had been transferred based on a change in title.?Like many of the cases discussed so far, the transfer in question was a husband transferring his portion of the title to his wife.?The relevant facts are that the husband made all payments to the mortgagee, being a bank, but the wife was ultimately the only person on title. The transferee submitted that even though the title to a real property had been changed so that it was held by only her, the additional value of the transferee’s equity was not a property in itself.?The Act defines “property” as:

any kind whatever whether real or personal or corporeal or incorporeal and, … includes

(a)???a right of any kind whatever, a share or a chose in action,

(b)???unless a contrary intention is evident, money,

(c)???a timer resource property, and

(d)???the work in progress of a business that is a profession.[59]

The Court in Medland agreed at the outset that there was no direct transfer of property, but did spend time discussing whether an indirect transfer of property had occurred.?The Court noted that the transferee was the mortgagor and therefore had a bundle of rights related to her holding of the title to the property, including that upon the last payment being received by the mortgagee, the transferee would have the right to full clear title of the property.?The Court further noted that one of the rights the transferee had as the mortgagor was the equity on redemption, which could be disposed of like any other interest in land.?To this end, the Court agreed that as the definition of “property” includes “a right of any kind whatever”, an indirect transfer of property had occurred.[60]

c.?????Not a Property

Another defence a taxpayer could try is to agree that a transfer had taken place, but assert that the thing transferred was not something meeting the definition of a property.?While this is unlikely to be an argument that is readily available to most taxpayers, in Aitchison Professional Corporation v. The Queen[61] the question was whether the right to invoice for legal services was a property for the purposes of s. 160(1).?At the outset, the Court noted that the Minister was trying to fit a square peg into a round hole,[62] and said that whether the right to invoice for legal services is a property would depend on how the right arose and was transferred.[63] ?

In this case, the Minister attempted to assert that lawyers give up their right to invoice for legal services when they are employees, and that the right becomes that of their employer.?The Court clearly laid out that services provided by an employee to a law firm are not a property, and a lawyer agreeing not to compete with the law firm they are employed by is also not within the definition of “property”.[64] ?By contrast, the Court said that had a lawyer contracted to provide services for $200,000 per year and later waived the right to receive the amount, the lawyer could be said to have transferred the property in the salary receivable.[65]

The Court in Aitchison also declined to accept the definition of “property” from other statutes when the Act has defined “property” in s. 248(1) for all purposes under the Act.[66] ?The Court went on to note that a lawyer who has performed legal services and therefore has the right to issue a bill for those services could be said to have fallen under the portion of the definition of “property” that is a “work in progress of a business that is a profession”; however, the Minister had not advanced this argument, and so, the Court did not have the benefit of evidence to support such an argument before it, and could not therefore consider the position.[67]

d.????Bankruptcy

Notwithstanding all of the foregoing, where a transferor taxpayer is a bankrupt, the mere status of being a bankrupt does not, in and of itself, serve to shield a transferee taxpayer from liability resultant from an assessment under s. 160.?In a case called Heavyside v. R.,[68] where, not unlike other cases already discussed, the transferor transferred his half interest in a property to his wife, resulting in her being the sole owner of the property, the issue was whether a transferee was still liable for a tax debt if the transferor was not by virtue of some other operation of law.?

As of the date of the transfer, the transferor had a tax debt in excess of the value of the transferred property.?Subsequently, the transferor made an assignment in bankruptcy, and was then discharged shortly thereafter.?When the transferee taxpayer was then assessed under s. 160 for her husband’s pre-bankruptcy tax debt, she appealed to the Tax Court asserting that her husband, as a discharged bankrupt, was no longer liable for the tax debt, and to which end neither was she.[69]

The Court in Heavyside clearly stated that the “liability arises at the moment of the transfer and is joint and several with that of the transferor.”?The Court went on to note that “[t]he transferee’s joint liability will only disappear with a payment made by her or by the transferor in accordance with [the Act].”[70] ?Worth keeping in mind is that the Heavyside decision addresses the joint and several liability of the transferee, and not whether the transferee, who has been assessed under s. 160, has the right to object to the underlying assessment of the transferor as was the case in Gaucher.[71]

To be clear, the Court in Heavyside did not say the liability of the discharged bankrupt carries on, but rather, that the liability of the transferee persists on the basis that the transferee is considered jointly and severally (or solidarily), liable to pay, and that the liability arose at the time of transfer.[72] ?In its explanation, the Court affirmed a case indexed as Garland v. Minister of National Revenue, where that court had said “it [was] clear that the Bankruptcy Act did not intend a person who was “jointly bound” with the bankrupt to [also] be released by the discharge of the bankrupt.”[73]

The Court in Garland had explained that the bankruptcy of a transferor could not be said to have any effect on the transferee, being a separate person, and that the liability of the transferee is attached by way of the wording of the Act.[74] ?Remembering that s. 160 is just one of the many sections of the Act aimed at curtailing a taxpayer’s avoidance activities, the Court in Garland put it quite well that “[a]ny other interpretation would defeat the purpose of [s. 160] because the husband could transfer property to his wife, declare bankruptcy and know that as soon as he was discharged his wife’s liability which arises out of the operation of the relevant statue, would also be extinguished.”[75]

????????????????????????V.?????????Conclusion

While much of the foregoing may seem straightforward, s. 160 has been brought up in over 1000 cases before the courts to date.?Therefore, even though s. 160 is aimed at preventing a person from transferring property in such a fashion so as to defeat a tax obligation, as evidenced by our brief exploration above, it would seem that an assessment of a transferee under s. 160 is not a definitive determination that the transferee will indeed be liable for the tax debt originally incurred by the transferor.?Certainly though, any taxpayer seeking to rebut an assessment made under s. 160, ought to ensure sufficiently good documentation exists to support their position.

[1] Livingston v. R., 2008 FCA 89.

[2] Brian J. Arnold and Jinyan Li, “Justice Bowman on Substance over Form” (2010) 58 Canadian Tax Journal 127-39.

[3] Colin Campbell, Administration of Income Tax 2020 (Thomson Reuters, 2020), at 4.16.2.5, p. 221; D’Argys v. Minister of National Revenue (1991), 92 D.T.C. 1710.

[4] Wannan v. R., [2003] F.C.J. No. 1693, at para 3.

[5] Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended, s. 160.

[6] Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended, s. 160(1)(a-c).

[7] Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended, s. 248(1).

[8] Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended, s. 74-75.1.

[9] Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended, s. 160(1)(d); Infra, at note 25.

[10] Wannan v. R., [2003] F.C.J. No. 1693.

[11] The Shorter Oxford Dictionary, 3rd ed. (Oxford University Press), definition of “at arm’s length”, as cited in Jinyan Li, Joanne Magee, and J. Scott Wilkie, Principles of Canadian Income Tax Law, 9th ed. (Thomson Reuters, 2017), at 10.4(c)(iii), p. 313.

[12] ex: sections 18(4), 56(4.1), 78(1), 84.1, 118.1, 160, 212, 247, 248(1).

[13] Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended, s. 248(1).

[14] Income Tax Folio S1-F5-C1, “Related Persons and Dealing at Arm’s Length”, May 2, 2014, as amended June 9, 2016, and November 26, 2015.

[15] Livingston v. R., 2008 FCA 89, at para 10 citing Elmer A. Driedger, The Construction of Statutes (Toronto: Butterworths, 1974) at 67; also see Rizzo & Rizzo Shoes Ltd., Re, [1998] 1 S.C.R. 27 at 41, and Bell ExpressVu Ltd. Partnership v. Rex, 2002 SCC 42, at para 26.

[16] Supra, at note 5.

[17] Tétrault c. R, 2004 TCC 332, at para 31.

[18] Petro-Canada v. R., 2004 FCA 158, at para 54.

[19] Peter Brown, [2003] 3 C.T.C. 351.

[20] Yates v. R., 2009 FCA 50 as cited in Dreger v. The Queen, 2020 TCC 25; Wannan v. R., [2003] F.C.J. No. 1693 as cited in Tétrault c. R, 2004 TCC 332; Livingston v. R., 2008 FCA 89.

[21] Dreger v. The Queen, 2020 TCC 25; Livingston v. R., 2008 FCA 89; see also, Burns v. R., 2006 TCC 309, at para 18.

[22] Supra, at note 6.

[23] Gentile Holdings Ltd. v. The Queen, 2020 TCC 29.

[24] Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended, s. 160(d).

[25] Supra, at note 8; Id.

[26] Interpretation Bulletin IT-511R, “Interspousal and Certain Other Transfers and Loans of Property”, February 21, 1994; Income Tax Bulletin IT-325R2, “Property Transfers After Separation, Divorce and Annulment”, January 7, 1994; CRA Views 9430155 “Attribution and capital gains election for residence”, February 21, 1995; Interpretation Bulletin IT-510, “Transfers and Loans of Property made after May 22, 1985 to a Related Minor” December 30, 1987.

[27] Heavyside v. R., [1996] F.C.J. No. 1608, at para 9.

[28] T.C.J. No. 742.

[29] Logiudice v. R., [1997] T.C.J. No. 742, at para 16.

[30] Dupuis v. M.N.R., 93 D.T.C. 723; Ferracuti v. R., [1998] T.C.J. No. 833.

[31] Tétrault c. R., 2004 TCC 332, at para 33.

[32] Gaucher v. R., [2000] F.C.J. No. 1869, at para 3.

[33] Tétrault c. R., 2004 TCC 332; Addison & Leyen Ltd. v. Canada, 2007 SCC 33.

[34] 2004 TCC 332.

[35] Wannan v. R., [2003] F.C.J. No. 1693 as cited in Tétrault c. R, 2004 TCC 332.

[36] Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended, s. 248(1); Infra, at note 60.

[37] 2015 TCC 135.

[38] Hardtke v. R., 2015 TCC 135, at para 33-34, referencing Madsen v. R., 2006 FCA 46.

[39] Phillips v. R., 93 D.T.C. 573.

[40] Phillips v. R., 93 D.T.C. 573, at para 17.

[41] Phillips v. R., 93 D.T.C. 573, at paras 43-44.

[42] Waugh v. R., 2007 TCC 494; Wannan v. R., 2003 FCA 423.

[43] Waugh v. R., 2007 TCC 494.

[44] Colin Campbell, Administration of Income Tax 2020 (Thomson Reuters, 2020), at 10.5-10.10.

[45] Gaucher v. R., [2000] F.C.J. No. 1869; Atwill-Morin c. R., 2016 TCC 127.

[46] [2000] F.C.J. No. 1869.

[47] Heavyside v. R., [1996] F.C.J. No. 1608; Infra, at note 69.

[48] Gaucher v. R., [2000] F.C.J. No. 1869.

[49] 2015 TCC 135.

[50] Ellis v. R., 2015 TCC 285, citing Beaudry v. R., 2003 TCC 464.

[51] Ellis v. R., 2015 TCC 285.

[52] 2017 TCC 175.

[53] Konyi v. The Queen, 2017 TCC 175, at para 37.

[54] Landry v. R., 2000 D.T.C. 1460.

[55] 95 D.T.C. 44.

[56] Fasken Estate v. Minister of National Revenue (1948), 49 D.T.C. 491.

[57] LeBlanc v. R., [1999] T.C.J. No. 66.

[58] [1997] 1 C.T.C. 2702.

[59] Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended, s. 248(1).

[60] Medland v. R., [1997] 1 C.T.C. 2702, at paras 27-29.

[61] 2018 TCC 131.

[62] Aitchison Professional Corporation v. The Queen, 2018 TCC 131, at para 10.

[63] Aitchison Professional Corporation v. The Queen, 2018 TCC 131, at para 9.

[64] Aitchison Professional Corporation v. The Queen, 2018 TCC 131, at para 17.

[65] Aitchison Professional Corporation v. The Queen, 2018 TCC 131, at para 18.

[66] Aitchison Professional Corporation v. The Queen, 2018 TCC 131, at para 23.

[67] Aitchison Professional Corporation v. The Queen, 2018 TCC 131, at para 25.

[68] Heavyside v. R., [1996] F.C.J. No. 1608.

[69] Heavyside v. R., [1996] F.C.J. No. 1608, at paras 1-5.

[70] Heavyside v. R., [1996] F.C.J. No. 1608, at para 9.

[71] Gaucher v. R., [2000] F.C.J. No. 1869; Supra, at note 47.

[72] Heavyside v. R., [1996] F.C.J. No. 1608, at para 10.

[73] Heavyside v. R., [1996] F.C.J. No. 1608, at para 12, citing Garland v Minister of National Revenue, 88 D.C.T. 1271.

[74] Garland v Minister of National Revenue, 88 D.C.T. 1271, at para 18.

[75] Garland v Minister of National Revenue, 88 D.C.T. 1271, at para 19.