Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 216320
Dear [Client]:
Subject: GST/HST RULING
Transfer of ownership of a Trailer
Thank you for your letter of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to the transfer of ownership of your […][travel trailer].
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand the following further to the documents and information you provided on [mm/dd/yyyy]:
1. You […], along with […](the “Co-owners”), own a […][yyyy model […] travel trailer] (VIN [#])[the Trailer], […].
2. […][The Trailer] was acquired on [mm/dd/yyyy], from […] (the “Vendor”).
3. […].
4. […].
5. [The Trailer] was never used in any business, adventure or concern in the nature of trade or supplied by way of lease, licence or similar arrangement.
6. You and the Co-owners are not in the business of buying and selling personal property […].
7. You and the Co-owners are not registered for GST/HST purposes.
8. Since the Co-owners no longer wish to use [the Trailer] due to their age, they intend to transfer their part of ownership in [the Trailer] to You.
RULING REQUESTED
You would like to know if the transfer of [the Co-owners’ part of] ownership of [the Trailer], from [the Co-Owners] to you, would be subject to the GST/HST.
RULING GIVEN
Based on the facts set out above, we rule that the transfer of [the Co-owners’ part of] ownership of [the Trailer], from [the Co-owners] to you, would not be subject to the GST/HST.
EXPLANATION
Section 165 provides that every recipient of a taxable supply made in Canada shall pay tax in respect of the supply. A “taxable supply” is defined in subsection 123(1) as a “supply that is made in the course of a commercial activity”.
As per subsection 123(1), “supply” means “the provision of property or a service in any manner, including sale, transfer, barter, exchange, licence, rental, lease, gift or disposition”.
A “commercial activity”, as defined in subsection 123(1), means a “business carried on by a person”, “an adventure or concern in the nature of trade”, or the “supply by the person of real property”, and excludes the making of exempt supplies.
In order to determine if […][the transaction] is subject to GST/HST, we must first analyze if it constitutes a “supply” in itself.
Based on our understanding of the information provided to us, we have determined the transfer of ownership of [the Trailer] to be a supply of personal property. As per the definition of supply in subsection 123(1), the transfer of ownership from the Co-owners to You is the “provision of property in any manner”. Moreover, since [the Trailer] is not real property, it is personal property, as per subsection 123(1).
For the supply to be subject to GST/HST as a taxable supply, it needs to be made in the course of a commercial activity. Since the supply of […][the Co-owners’ part of ownership of the Trailer] to You is not made in the course of a business, adventure or concern in the nature of trade, nor does it constitute the supply of real property, it is not a taxable supply.
Consequently, the supply of [the Trailer] is not subject to GST/HST.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling given in this letter provided that: none of the issues discussed in the ruling are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly […]. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Stéphanie Blanchette
Real Property Unit 2
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
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