transfer

After finding that s. 160(1) applied to a cash dividend paid by a private corporation to its shareholder, Rip J. went on to find that s. 160(1) did not apply to a stock dividend given that the issue of shares is not a "transfer" because the corporation has not divested itself of its property, and given that there is no transfer of property when a dividend is declared by the directors, as the funds represented by the dividend are under the control of the corporation until the corporation pays the dividend.

The taxpayer's common-law partner, in order to circumvent a hold on his account relating to personal financial difficulties, would have the taxpayer deposit the cheques in her account, and then usually transfer the funds to him on the same day. Tardif J. found that these transactions did not effect a "transfer of property" to the taxpayer for the purposes of s. 160(1). Although the Court of Appeal in Livingston held that the mere deposit of funds into another person's bank account constitutes a transfer of property, Tardif J stated (at TCC para. 35):

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) ...