transfer

The taxpayer was one of nine beneficiaries of a discretionary inter vivos personal trust which ceased to be resident in Canada in 2001. In January 2004, the trust distributed $2.25 million to the taxpayer, and in December 2005, made a further distribution to him of $0.83 million, as a result of which the trust was terminated.

The taxpayer’s husband (Mr. White), who had previously been assessed as director of a defunct company for unremitted net GST and source deductions, deposited over a one-year period, $89,806.72 to a joint bank account of him and the taxpayer. During that period, amounts were transferred from the joint bank account to the taxpayer’s own bank account, which the taxpayer used to pay family expenses.

The general contracting company (“CIA”) of two brothers was dissolved in January of 2008 (the “Dissolution Date”) for failure to file Ontario corporate tax returns. Although “upon such dissolution, the property of CIA technically and legally escheated to the provincial Crown” (para. 40), in fact, a CIA bank account was thereafter used to pay various CIA creditors. The Minister assessed the brothers under s. 160 on the basis of alleged property transfers to them after the Dissolution Date.

In finding that s. 74(1) applied to attribute dividend income to the taxpayer when he permitted his wife to subscribe for common shares of his private company for nominal consideration, Linden J.A. stated (p. 6386):

The will of the deceased taxpayer devised a life interest in some lands (the "home quarter") to his wife and the residue of his estate (including some additional lands) to his four children. 2 1/2 years after his death his wife obtained a court order pursuant to the Family Relief Act (Alberta) granting her the fee simple in the home quarter. At the same time, the additional lands were sold with the consent of the adult children and the proceeds distributed to them.

The appellant received a bequest under the will of his father, who died in the Cayman Islands while owing tax and interest to Revenue Canada. In finding that s. 160(1) applied to the appellant, Dussault TCJ. rejected submissions that s. 160 required an intention to evade tax obligations on the part of the transferor and that s. 160 did not apply to transfers by operation of law and not as a result of a positive act of a taxpayer. Dussault TCJ. stated (p.

Funds that the taxpayer's son had transferred into a dormant bank account of the taxpayer were held by her as agent for her son, with the result that there had not been a "transfer" for purposes of s. 160(1), i.e., "to convey or make over (title, right or property) by deed or legal process".