Tax Lec 6

Non-Arm’s Length Transfers

Define what Inadequate consideration mean in NALT

All gifts are deemed dispositions at FMV (even gifts to arm’s length persons) except for gifts to spouses

Sales to non-arm’s length persons

Attribution Rules

TOSI rules

To complete

Gifting family chart

To Complete

Avoiding Income Attribution Rules

Departure From Canada (Departure Tax)

▪      Taxpayers leaving the country and ceasing to be a resident of Canada must also file a list of properties owned at the time of departure with their tax return so that the CRA can verify that all deemed capital gains have been reported

▪      Five-year rule [ITA 128.1(4)(b)(iv)]

o   If you have been resident in Canada less than 60 months in the last 10 years, then the deemed disposition rules will not apply to any property brought to Canada

o   This rule was designed to facilitate short-term executive transfers to Canada

▪      When you become a resident of Canada, the cost of each of your capital properties (other than taxable Canadian property) for Canadian tax purposes is deemed to = FMV at the immigration date (the purpose of this rule to ensure that only capital gains accrued while being a resident of Canada are subject to Canadian tax)

Death of a Taxpayer

Problem case at end