Regarding a situation where the taxpayer was registered as a co-owner of a property with his son due to lender requirements and subsequently transfers his interest in the property to him, CRA stated:
[I]f a counter letter exists between you and your son - evidenced either by a verbal agreement or by the statutory declaration - the CRA will have to determine whether it agrees to be bound by this counter letter. This determination is a factual one that will seek to determine, among other things, whether your son has acted as the sole owner of the Home since the date of initial acquisition. In such a case, no capital gain would be realized upon the transfer of your interest in the Home to your son.