CRA does not have a policy to reduce a s. 160 assessment of a transferee of a Quebec tax debtor so as to avoid double taxation

Quebec has the equivalent of s. 160, so that a distribution of property worth, say, $100,000 by a Quebec tax debtor to a non-arm's length transferee can result in assessments of the transferee for $100,000 of tax by each jurisdiction.  CRA stated (presumably on the basis of the Cohen and Galway line of cases) that it does not have the authority to reduce its s. 160 assessment by the amount of the equivalent Quebec assessment.

A comparable situation of double taxation of a transferee under s. 160 and the HST/GST equivalent (ETA s. 325) will be avoided if the GST or HST assessment is issued second, which CRA will try to do.

Neal Armstrong.  Summary of 5 October 2012 APFF Round Table, Q. 27, 2012-0454241C6 F under s. 160(2).