Dear Sirs;
Re: Partition of Property
This is in reply to your letter of September 12, 1991 concerning the application of subsection 248(20) as proposed in Bill C-18 and is further to your letter of April 10, 1991 and our response thereto dated June 17, 191. We agree with your view that proposed subsection 248(20) would apply where property that was jointly owned is partitioned and each person has in the property a new interest the fair market value of which immediately after the partition expressed as a percentage of the fair market value of all the new interests in the property immediately after the partition, is not equal to the fair market value of that person's undivided interest immediately before the partition, expressed as a percentage of the fair market value of all the undivided interests in the property immediately before the partition.
In a situation where there is a subdivision of property followed by an exchange of titles it would be a question of fact whether there has been a partition in that each owner exchanges their undivided interest in the property for a divided interest in a subdivided parcel(s) and proposed subsection 248(20) would therefore apply or whether there has been an exchange by the owners of their undivided interest in the property for an undivided interest in each subdivided parcel, followed by an exchange of undivided interests for a divided interest in a subdivided parcel(s), which would not be a partition and consequently proposed subsection 248(20) would not apply. We note that proposed subsection 248(21) appears to be specifically intended to address the situation of joint owners required by municipal or other authorities to subdivide property before partitioning. Proposed subsection 248(21) requires a proportionate (in terms of fair market value of each interest) partition. This requirement is a matter of policy for the Department of Finance. Representations concerning this issue could be addressed to the attention of Mr. Marc Cuerrier.
We trust our comments will be of assistance to you."
Yours truly,
E. Wheeler for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch