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FEDERAL INCOME TAX - Administration and enforcement - Collection - Third-party assessments - Non-arm's length transfer

Wednesday, October 25, 2017 @ 8:35 AM  


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Appeal by Brassard from a Tax Court decision dismissing his appeal from an assessment finding him jointly liable for his brother's federal income tax debt. The Minister alleged the appellant's brother transferred real property to the appellant for less than fair market value while owing a tax debt. The Minister assumed that the appellant paid $50,000 for the property. The appellant challenged the Minister's assessment of the fair market value of the property at $120,600 as of the date of its transfer. In addition, the appellant alleged that he paid more than $50,000 for the property. The trial judge found that the appellant failed to establish that he had discharged a mortgage on the property, or that he added certain improvements to the property while it was in his brother's name. The amount of the benefit received by the appellant exceeded his brother's $115,000 tax debt. The appellant was accordingly found jointly liable for his brother's debt pursuant to s. 160 of the Income Tax Act. Brassard appealed.

HELD: Appeal dismissed. The appellant's fresh evidence of comparable sales was inadmissible, and effectively sought an opinion from the Court regarding fair market value that it was not entitled to provide, nor substitute for the trial judge's conclusion based on the evidence. There was no error in the Tax Court's decision justifying appellate intervention.

Brassard v. Canada, [2017] F.C.J. No. 930, Federal Court of Appeal, J.D.D. Pelletier, R. Boivin and M.J.L. Gleason JJ.A., October 11, 2017. Digest No. TLD-October232017006