CRA indicates that a spouse who was a registered co-owner of a property could be considered its beneficial owner even though she did not contribute to its purchase

S. 45(2) permits a taxpayer to elect to avoid a deemed disposition from a conversion of “property of the taxpayer” from personal to income-producing use. After noting that under s. 45, as in the rest of the Act, the quoted reference would be to the beneficial rather than legal owner, CRA went on to note that a wife who legally was the co-owner of the home in question (which had been converted to rental use) could be considered to be a ½ beneficial owner of the house for these purposes even though her husband provided all the purchase funds and had reported all the rental income. It defined beneficial ownership as:

[T]he type of ownership of a property by a person who is entitled to the use and benefit of the property whether or not that person has concurrent legal ownership. A person who has beneficial ownership but not legal ownership can enforce their ownership rights against the holder of legal title. … There is generally a presumption that the holder of legal title of a property is also the beneficial owner of the property, unless the facts support otherwise.

It concluded:

[I]f both spouses are considered to have beneficial ownership … they would both be required to file the election … .

Neal Armstrong. Summary of 9 May 2022 Internal T.I. 2018-0790251I7 under s. 45(2).