The Queen v. Paxton, 97 DTC 5012 (FCA) -- summary under Ownership

After the taxpayer entered into an agreement for the sale of shares then owned by him to an arm's-length purchaser ("Tandet"), he took advantage of a provision in the agreement that permitted him, prior to the closing date, to elect to transfer his shares to family members on the condition that the family members complete the sale. In finding that there was no "transfer" to the children for purposes of s. 73(5) of the Act, Robertson J.A. stated (at p. 5016) that "the type of transfer embraced by subsection 73(5) ... is, at a minimum, one which enables the purchaser to exercise the degree of control necessary to determine the ultimate fate of the family business," whereas here, the agreement deprived the children of this right and "they had no right to the use or enjoyment of the shares other than to transfer them within one day to Tandet and to retain a small portion of the sale proceeds."