2143569 Ontario – Ontario Superior Court finds that a registered recital of the current beneficial owner does not eliminate the Ontario land transfer tax deferral on a previous inter-affiliate transfer

The land transfer tax exemption in s. 3(9) of the Ontario Land Transfer Tax Act for inter-affiliate transfers of beneficial ownership takes the form of an application for a deferral of that tax with the tax then being conditionally eliminated after three years upon the satisfaction of specified conditions including that there has been no registration of a conveyance or instrument evidencing that disposition.

The Ministry of Revenue unsuccessfully took the position that the registration on title by the local City of a development agreement, which simply recited who was the current beneficial owner of the property, evidenced the fact that there had been a previous transfer (in an inter-affiliate transaction) of the beneficial ownership to that corporation.  Lofchik J stated that "evidence of ‘the’ disposition would at the very least have to identify the entity disposing of the property," so that a bare recital of the current beneficial owner was not enough to oust the exemption.

Neal Armstrong.  Summary of 2143569 Ontario Inc. v. Minister of Revenue, 2014 ONSC 4628 under Land Transfer Tax Act, s. 3(11)(a).