2252493 Ontario – Tax Court of Canada refuses to relieve from charging HST on a real estate sale where the purchaser’s bare trustee capacity was undisclosed

The vendor of a commercial property signed a sale agreement with a purchaser (Mayling) who was not registered for HST purposes – but then, on closing, was directed to transfer title to a purchaser (840 Holdings), which was HST-registered. The vendor was later informed that, in fact, 840 Holdings was purchasing on behalf of two other registered companies who had acquired beneficial co-ownership interests in the property – and who self-assessed themselves for the applicable HST.

Bocock J found that there was no contemporaneous documentation to establish that the “beneficial owners” had relieved 840 Holdings of its obligations under the purchase agreement, so that the vendor was liable for failure to charge HST on a sale to an unregistered purchaser (Mayling).

Neal Armstrong. Summary of 2252493 Ontario Ltd., v The Queen, 2017 TCC 20 under ETA s. 221(2).