Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Whether a severed lot from a farm qualifies as a "qualified farm property if subsequently sold by a separated or divorced taxpayer.
Position TAKEN:
Such a property would not be precluded from satisfying the definition of qualified farm property.
Reasons FOR POSITION TAKEN:
Where the requirements of the definition of qualified farm property are satisfied by a spouse during the time that a spouse relationship existed, then a divorced spouse who also owns qualified farm property would be entitled to claim the capital gains exemption.
L. Barrows
XXXXXXXXXX 951627
Attention: XXXXXXXXXX
October 6, 1995
Dear XXXXXXXXXX:
Re: Meaning of Spouse Relating To "Qualified Farm Property"
This is in reply to your letter of June 14, 1995 concerning the above referenced subject. You request clarification whether a lot that is severed from a farm property qualifies as a "qualified farm property" if the severed lot is owned by a separated or divorced taxpayer at the time it is subsequently sold.
The situation outlined in your letter appears to relate to an actual proposed transaction involving identifiable taxpayers. Confirmation as to the tax consequences of proposed transactions can only be given in the context of an advance income tax ruling. The procedures for making a request for an advance income tax ruling are outlined in Information Circular 70-6R2, dated September 28, 1990, issued by Revenue Canada. However, we can offer the following general comments.
You are concerned with whether property would be precluded from satisfying the definition of qualified farm property in subsection 110.6(1) of the Income Tax Act where the spouse relationship referred to therein no longer exists at the time of disposition due to separation or divorce. In our view, such a property would not be precluded from satisfying the definition of qualified farm property. Where the requirements of the definition of qualified farm property are satisfied by a spouse during the time that a spouse relationship existed, then a divorced spouse who owns qualified farm property would be entitled to claim the capital gains exemption.
We trust that these comments will be of assistance to you, however, they should not be construed as implying that the Department confirms that the particular lot in question is qualified farm property.
Yours truly,
R. Albert
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1995
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1995