CRA indicates that a transfer structured as a sales agreement for nominal consideration may qualify as a gift

A parent gifted property to a child. A correspondent seemed to assume that this gift was legally required to be effected through an agreement specifying nominal consideration (of $1), with such nominal consideration actually being paid, rather than the gift being effected through a deed of gift. Would this be respected as a gift so that s. 69(1)(c) applied? CRA responded that it:

may be willing to accept that the transfer of property between non-arm’s length parties for the nominal amount of $1 could be considered a gift. For example, if the agreement governing the transfer provides for consideration of $1 merely to ensure that the agreement is legally binding, the CRA may consider the transfer to be a gift.

… If it is determined that the transfer of property was a sale for inadequate consideration rather than a gift, paragraph 69(1)(c) would not apply.

Neal Armstrong, Summary of 24 January 2019 External T.I. 2018-0773301E5 under s. 69(1)(c).