CRA confirms that TOSI does not apply to rental properties held by individual co-owners

CRA confirmed that generally “split income … include[s] amounts that are included in a specified individual’s income in respect of a corporation, partnership or a trust … [and] does not include amounts that are included in the income of a specified individual as a result of the direct ownership of real property.” Accordingly, the tax on split income would not apply to rental income earned on rental properties held by related individuals in co-ownership, or taxable capital gains realized on the properties’ disposition.

Neal Armstrong. Summary of 26 November 2020 STEP Roundtable, Q.7 under s. 120.4(1) – split income.