CRA does not accommodate using attribution rules to split income from a professional corporation with the spouse

S. 74.5(11) denies the application of the attribution rules if it may reasonably be concluded that "one of the main reasons" for the relevant property transfer was to reduce tax on the income derived from the property.

A professional who was incorporating a professional practice would first jointly incorporate the corporation with his spouse, with his spouse then gifting her shares to him. After noting his submission that the sole reason for the gift of the shares from his spouse was a regulatory requirement that professional corporations be solely owned by professionals, CRA stated that it was possible that s. 74.5(11) would apply to deny attribution of dividend income on the gifted shares back to the spouse.

Neal Armstrong.  Summary of 24 March 2014 T.I. 2014-0519661E5 under s. 74.5(11).