France Thalheimer v. Minister of National Revenue, [1983] CTC 2539, 83 DTC 498

St-Onge, TCJ [ORALLY]:—The appeal of Mrs France Thalheimer came before me on January 27, 1983 in the City of Sudbury, Ontario and it has to do with amounts of money deposited by her husband in her bank account in the appellant’s 1978, 1979, 1980 and 1981 taxation years.

The facts of this appeal are set forth in paragraph 5 of the reply to the notice of appeal which reads as follows:

5. He assessed the Appellant under subsection 160(2) of the Income Tax Act by Notice of Assessment number 405861, dated 30 March 1982, in the amount of $76,500, and in so doing he assumed, among others, the following facts:

(a) The Appellant is the spouse of Peter F Thalheimer (“Peter”).

(b) For the 1977 to 1980 taxation years, Peter was liable to pay amounts not less than the following under the Income Tax Act’.

1977	$ 63,540.48
1978	$ 73,149.36
1979	$ 10,361.68
1980	$ 6,064.03
	$153,115.55

(c) From 14 March 1978 to 8 December 1981, Peter transferred property to the Appellant, the total value of which was not less than $76,500. During each of the years, the value of the property transferred was not less than the following:

1978	$ 23,000
1979	$ 15,500
1980	$ 12,500
1981	$ 25,500
	$ 76,500

(d) The property consisted of cheques written by Peter on his general business account. The transfer was effected by Peter depositing these cheques (or portions of them) in the Appellant’s bank account number 574-358-8 at the Royal Bank of Canada, 38 Pine Street North, Timmins, Ontario. Details of these deposits are shown in Schedule A.

(e) The Appellant was the only person entitled to withdraw money from account number 547-358-8 [sic] and write cheques on that account. When cheques were deposited in that account, they became her absolute property. From March 1978 to December 1981, she wrote cheques totalling approximately $102,000 on that account.

(f) On the day of each individual transfer shown in Schedule A, Peter was liable to pay under the Income Tax Act an amount exceeding the individual transfer, and an amount exceeding the sum of the individual transfer plus all previous transfers.

The evidence has shown that the appellant’s husband had deposited in her bank account the amounts of money mentioned in the reply to the notice of appeal to know [sic] $76,500.

The appellant also contends that these deposits were not a transfer of property within the meaning of section 160 of the Income Tax Act SC 1970- 71-72, c 63, as amended. The Court refers the appellant to the definition of “Property" at section 248 of the Income Tax Act which reads as follows:

“Property”. — “property” means property of any kind whatever whether real or personal or corporeal or incorporeal and, without restricting the generality of the foregoing, includes

(a) a right of any kind whatever, a share or a chose in action,

(b) unless a contrary intention is evident, money, and

(c) a timber resource property;

Furthermore, there is no evidence to the effect that a part of the $76,500 was the appellant’s money nor that the wife’s income had been improperly included by the Minister in her husband’s income.

Consequently, the decision in Kathleen Gayle Thorsteinson v MNR, [1980] CTC 2415; 80 DTC 1369, should not apply. In the decision of Maria Elizabeth Rafael v MNR, [1978] CTC 2398; 78 DTC 1300, it was decided that there was no transfer of property since the husband was not the sole owner of the equity as alleged by the Minister and that the appellant had made the down- payment on the house. As may be seen, these two cases are distinguishable from the case at bar, since it is obvious from the evidence adduced that the $76,500 deposited by the husband in the appellant’s bank account was his money and not hers.

In the present appeal it is immaterial to know whether this money deposited in the appellant’s account was for household obligations or else the total amount of $76,500 was the husband’s money which was transferred in the appellant’s bank account.

Consequently, the Court has no other alternative than to apply section 160 of the Income Tax Act which reads as follows:

160. Tax on income from property transferred between husband and wife or to minors.

(1) Where a person has, on or after the 1st day of May, 1951, transferred property, either directly or indirectly, by means of a trust or by any other means whatever,

(a) to his spouse or to a person who has since become his spouse, or

(b) to a person who was under 18 years of age,

the following rules are applicable:

(c) the transferee and transferor are jointly and severally liable to pay a part of the transferor’s tax under this Part for each taxation year equal to the amount by which the tax for the year is greater than it would have been if it were not for the operation of section 74 or section 75, as the case may be, in respect of income from the property so transferred or from property substituted therefor;

and

(d) the transferee and transferor are jointly and severally liable to pay the lesser of

(i) any amount that the transferor was liable to pay under this Act on the day of the transfer, and

(ii) a part of any amount that the transferor was so liable to pay equal to the value of the property so transferred;

but nothing in this subsection shall be deemed to limit the liability of the transferor under any other provision of this Act.

The respondent has substantiated paragraph 5 of his reply to the notice of appeal. According to section 160 of the Act and also following the evidence adduced, the appeal should be dismissed.

Appeal dismissed.