Soutar Décor – Tax Court of Canada finds that seizure of a guarantor’s security constitutes a transfer by the guarantor for s. 160 purposes

Bocock J found that when a bank seized the security (a GIC) provided by a tax debtor to secure his guarantee of a bank loan to his son’s company, this constituted a transfer of property by him to that company for s. 160 purposes. It made no difference that the transfer was involuntary.

This result is broadly consistent with the proposition that payment of another’s debt constitutes payment to that person (see Innovative Installation and Great-West).

Neal Armstrong. Summary of M. Soutar Décor 2000 Ltd. v. The Queen, 2016 TCC 62 under s. 160(1).