Subsection 73(1) - Inter vivos transfers by individuals
Administrative Policy
15 June 2022 STEP Roundtable Q. 12, 2022-0929321C6 - Sale to Alter Ego Trust
After having previously settled an alter ego trust whose trust deed provides that the settlor is not entitled to receive or otherwise obtain the...
14 March 2016 External T.I. 2016-0626781E5 - Neuman Type Situation
In the scenario where a company owned by Mr. A ssues a share to Mrs. A for nominal consideration, and then pays a substantial dividend to Mrs. A,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | s. 15(1) might apply where spouse subscribes nominal consideration for Opco shares and receives a large discretionary dividend | 226 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(2) | s. 56(2) likely non-applicable where spouse subscribes nominal consideration for Opco shares and receives a large discretionary dividend | 262 |
| Tax Topics - Income Tax Act - Section 246 - Subsection 246(1) | Kieboom treated as entailing disposition of right to receive dividends | 340 |
28 June 2012 External T.I. 2011-0427871E5 F - Application des paragraphes 98(3) 98(5) et 73(1)
Two spouses (Monsieur and Madame) were the members of a farming partnership. Upon their separation, the partnership began renting the land. The...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 98 - Subsection 98(5) | rental operation generating property income is a business for s. 98(5) purposes | 181 |
25 May 1995 External T.I. 9505015 - MEANING OF "ENTITLED TO RECEIVE"
"The phrase 'entitled to receive' all of the income of the trust means to have a legal right to enforce payment of that income. For a spouse to...
5 April 1991 T.I. (Tax Window, No. 2, p. 27, ¶1196)
Where a spouse obtains an option to acquire a property from the other spouse and exercises the option after divorce, s. 73(1)(b) does not apply...
Paragraph 73(1)(b)
See Also
Ellison v Sandini Pty Ltd, [2018] FCAFC 44
Australian Family Court orders, that were made by consent between Mr and Ms Ellison, required a corporation (“Sandini” - that was controlled...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Ownership | family court order requiring the transfer of a portion of a larger bloc of shares likely did not result in a change in their beneficial ownership as the shares likely were not fungible | 1019 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | family court order did not effect a change in beneficial ownership of a larger bloc of shares held by the original owner (and in any event, the order named the wrong person) | 768 |
| Tax Topics - General Concepts - Evidence | a court order could not be interpreted in light of extrinsic evidence | 102 |
Subsection 73(1.01) - Qualifying transfers
Paragraph 73(1.01)(b)
Administrative Policy
13 July 2011 External T.I. 2011-0400951E5 F - Alinéa 73(1.01)b) - régime de séparation de biens
An individual and his spouse, who had been married under the separation of property regime, stopped living together. The following year, they...
6 October 2017 APFF Financial Strategies and Instruments Roundtable Q. 1, 2017-0705221C6 F - Property transfers - common law partners in Québec
Respecting the rollover under ss. 73(1.01)(b), 146(16) and 146.3(14) provide to a common-law partner or a partner plan pursuant to a written...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 146 - Subsection 146(16) - Paragraph 146(16)(b) | a common-law partners’ separation agreement can engage s. 146(16)(b) or 146.3(14) rollover even if technically they have no legal rights to settle | 284 |
| Tax Topics - Income Tax Act - Section 146.3 - Subsection 146.3(14) | rollover pursuant to common-law partners' settlement agreement | 104 |
27 September 2016 Internal T.I. 2015-0572901I7 - Deferral of employment benefit under ss. 7(8)
The employment benefit associated with the exercise by Taxpayer A of the stock options was deferred under s. 7(8) (since repealed). Taxpayer A is...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 7 - Subsection 7(8) | deferred amount triggered on rollover | 62 |
7 October 2016 APFF Financial Strategies and Instruments Roundtable Q. 5, 2016-0651721C6 F - Application of subsections 146(16) and 73(1) after death
Mr agreed in his separation agreement with Mrs to transfer to her a capital property. However, he died before the transfer was made. Does CRA...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 146 - Subsection 146(16) | no tax deferred transfer if by estate | 135 |
14 January 2013 External T.I. 2012-0469571E5 F - Settlement of rights arising out of marriage
Pursuant to a judgment for the divorce of X and Y, the Court awarded X an lump sum as support but, in order for this support obligation to be paid...
23 December 2003 External T.I. 2003-0008145 F - TRANSFERT ENTRE EX-CONJOINT
A corollary relief agreement, subsequently ratified by the divorce judgment, declared that Madame owned a chalet to which Monsieur renounced any...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(23) | deemed transfer to spouse before divorce where property was subject to matrimonial regime to which s. 248(3) applied, so that no need to rely on being in settlement of matrimonial rights | 258 |
| Tax Topics - Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) | one-sided adjustments under ss. 69(1)(b) and (a) | 108 |
Paragraph 73(1.01)(c)
Administrative Policy
27 October 2020 CTF Roundtable Q. 7, 2020-0861041C6 - CTF Question 7 - Subsection 105(1)
Does the CRA position on the use of personal-use property (e.g., homes, cottages, boats and cars) by an individual beneficiary also apply to a...
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|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 105 - Subsection 105(1) | generally no taxable benefit for beneficiary’s rent-free use of personal-use property of the trust | 185 |
5 October 2018 APFF Roundtable Q. 3, 2018-0768841C6 F - Rollover under 73(1) and gifts to charities
In the event that the terms of the deed of trust for one of the trusts intended to qualify under ss. 73(1.01) and (1.02) provide for the...
16 November 2015 External T.I. 2014-0529361E5 - Spousal trust & life insurance
In finding that the use of income or capital from a purported spousal trust to pay life insurance premiums on spouse's life would disqualify trust...
6 May 2014 May CALU Roundtable, 2014-0523331C6 - CALU CRA Roundtable Q
Easingwood v. Cockroft, 2013 BCCA 182, found that an Attorney under a general power of attorney could establish an inter vivos trust on behalf of...
16 June 2014 STEP Roundtable, 2014-0523031C6 - 2014 STEP CRA Roundtable Question
The settlor of an inter vivos trust is entitled to receive all the trust income during his or her lifetime and, if survived by his or her spouse...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Joint Spousal or Common-law Partner Trust | "combination" requirement satisfied where predeceased spouse | 177 |
25 June 2014 External T.I. 2012-0469331E5 - Blind Trust
Upon being appointed to a public office an individual was required to settle a blind trust of which he was the beneficiary. What are the...
Articles
Elie Roth, Tim Youdan, Chris Anderson, Kim Brown, "Classification of Trusts for Income Tax Purposes", Chapter 2 of Canadian Taxation of Trusts (Canadian Tax Foundation), 2016.
Joint spousal trust (p. 100)
Paragraph 73(1.01)(c) might seem to indicate that only one spouse can transfer property to a particular joint spousal...
Subparagraph 73(1.01)(c)(ii)
Administrative Policy
30 March 2022 External T.I. 2017-0737181E5 F - Right to receive income from a trust
Regarding whether a trust would satisfy the conditions of s. 73(1.01)(c)(ii) if the right of the settlor and beneficiary to demand payment of the...
9 April 2020 External T.I. 2014-0527261E5 F - Beneficial ownership discretionary power of trustees
An individual resident in Canada settles and contributes capital property to a trust governed by the Civil Code of Québec (the "C.C.Q.") under...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 107.4 - Subsection 107.4(1) - Paragraph 107.4(1)(a) | discretion of trustees to retain capital or income rather than distribute to the sole current beneficiary does not preclude the latter being the beneficial owner | 277 |
| Tax Topics - Income Tax Act - 101-110 - Section 107.4 - Subsection 107.4(1) - Paragraph 107.4(1)(i) | discretion of trustees to retain capital or income rather than distribute to the sole current beneficiary precluded s. 73(1.01)(c)(ii) application and satisfied s. 107/4(1)(i) | 291 |
| Tax Topics - General Concepts - Ownership | discretion of trustee to accumulate rather than distribute income to sole beneficiary did not detract from beneficial ownership | 269 |
21 April 2016 External T.I. 2015-0607451E5 F - Use of capital of a trust by a spouse
An individual, who owned a principal residence that he occupied with his wife, transferred the residence to a trust referred to in s....
14 March 2012 External T.I. 2011-0423291E5 F - Fiducie pour soi-même sans limite d'âge
Two spouses (Mr. X and Ms. X) and their two adult children wish to contribute their jointly owned shares of Holdco to a newly-settled protective...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 73 - Subsection 73(1.01) - Paragraph 73(1.01)(c) - Subparagraph 73(1.01)(c)(iii) - Clause 73(1.01)(c)(iii)(A) | two spouses separate from their children can create a joint spousal or common-law partner trust | 156 |
| Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(1) - Testamentary Trust | tainting effect of joint spousal or common-law partner trust on subsequent testamentary trust | 211 |
| Tax Topics - Income Tax Act - 101-110 - Section 107.4 - Subsection 107.4(1) - Paragraph 107.4(1)(a) | joint protective trust would not satisfy paras. (a) and (e) of "qualifying disposition" | 209 |
Subparagraph 73(1.01)(c)(iii)
Administrative Policy
15 June 2022 STEP Roundtable Q. 11, 2022-0929331C6 - Joint Spousal or Common-law Partner Trust
Once a joint spousal or common-law partner trust is created with a contribution of jointly-owned property by an individual and the individual’s...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) | s. 75(2) does not apply to 2nd-generation income | 270 |
15 June 2021 STEP Roundtable Q. 12, 2021-0885671C6 - Property owned jointly
Is it possible for spouses (or common-law partners), both of them over 65, to jointly create a trust which meets the s. 73(1.01)(c)(iii)...
Clause 73(1.01)(c)(iii)(A)
Administrative Policy
14 March 2012 External T.I. 2011-0423291E5 F - Fiducie pour soi-même sans limite d'âge
Two spouses (Mr. X and Ms. X) and their two adult children wish to contribute their jointly owned shares of Holdco to a newly-settled protective...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 73 - Subsection 73(1.01) - Paragraph 73(1.01)(c) - Subparagraph 73(1.01)(c)(ii) | joint protective trust would not satisfy s. 73(1.01)(c)(ii) | 180 |
| Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(1) - Testamentary Trust | tainting effect of joint spousal or common-law partner trust on subsequent testamentary trust | 211 |
| Tax Topics - Income Tax Act - 101-110 - Section 107.4 - Subsection 107.4(1) - Paragraph 107.4(1)(a) | joint protective trust would not satisfy paras. (a) and (e) of "qualifying disposition" | 209 |
Subsection 73(1.02)
Paragraph 73(1.02)(b)
Subparagraph 73(1.02)(b)(ii)
Administrative Policy
5 October 2012 Roundtable, 2012-0453911C6 F - Roulement à fiducie pour soi et faculté d'élire
Would the s. 73 rollover on a transfer of capital property to a Quebec trust comply with s. 73(1.02)(b)(ii) be jeopardized if the trust deed...
15 December 2003 External T.I. 2003-0182855 - Fiducie pour Loi au Quebec
Regarding the satisfaction by an individual that a transfer of property to a self-benefit trust established under Quebec law for that individual...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(3) - Paragraph 248(3)(e) | meaning of “a right as a beneficiary in a trust” is found in s. 248(25) | 184 |
| Tax Topics - General Concepts - Ownership | sole beneficiary of Quebec trust is the beneficial owner of its property | 273 |
| Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) | policy is for s. 75(2) application not to result in double taxation | 118 |
10 August 2001 External T.I. 2001-0084945 F - application des para. 73(1.01) et (1.02)
CCRA indicated that it would not comment on the application of s. 73(1.02)(b)(ii) to a trust created under Quebec civil law as this question was...
Subsection 73(1.1) - Interpretation
Cases
Re Schroepfer (1985), 12 DLR (4th) 613 (Sask QC)
It was suggested that the s. 73(1) rollover would be available by virtue of s. 73(1.1) if a court decree made pursuant to the Matrimonial Property...
Subsection 73(3) - When subsection (3.1) applies
Administrative Policy
11 June 2015 External T.I. 2014-0522641E5 F - Usufruct
A father, who has carried on a farming business for a number of years, grants the bare ownership of the property for consideration to his son...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(7) | creation of usufruct between father and son, resulting in deemed trust, did not entail property transfer to the deemed trust | 306 |
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Farm or Fishing Property | termination of usufruct between father and son on farmland, which was a deemed trust, did not entail disposition of qualified farm property | 246 |
IT268R4 ARCHIVED - "Inter Vivos Transfer of Farm Property to Child" 15 April 1996
Trusts for Minors
13. A parent may transfer property described in subsection 73(3)… or 73(4)… to a trust solely for the benefit of his or...
26 September 1996 T.I. 962503 (C.T.O. "Transfer of Farm Property to Child")
Where a transfer of farm property described in s. 73(3) occurs for no consideration, or for consideration less than the land's adjusted cost base,...
1993 External T.I. 9321175 F - Transfer of Farm Property
It is not necessary that a particular asset be used in farming at a point in time immediately prior to the transfer. However, using the asset for...
16 December 1993 Income Tax Severed Letter 9316105 - Remainder Interest in Land
A remainder interest in land is "land" for purposes of s. 73(3) if the requirements in IT-268R3, para. 9 are satisfied and, if all other...
19 September 89 T.I. (February 1990 Access Letter, ¶1118)
Where a farmer gifts farm land to his son, s. 69 will not apply because of s. 73(3)(c). Therefore, the "proceeds of disposition otherwise...
Paragraph 73(3)(b)
Paragraph 73(3)(c)
Administrative Policy
12 September 2022 External T.I. 2020-0863671E5 - 73(3) rollover property farmed but not owned
In one of the two examples presented:
Mr. A started renting land from an unrelated person in 1987. In 2000, he and Mrs. A purchased the parcel...
10 November 2014 External T.I. 2014-0536851E5 F - Terre à bois et Plan d'aménagement forestier
In response to a request for clarification regarding the forest management plan ("FMP") criterion in s. 73(3)(c), CRA stated:
The mere absence of...
4 November 2011 Internal T.I. 2011-0413341I7 F - Bien agricole admissible
The taxpayer acquired farmland and rented 50% of it to an unrelated farm producer and 50% to a corporation that operated a nursery there and whose...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Farming | nursery qualifies as farming if focused on growing rather than selling | 107 |
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Share of the Capital Stock of a Family Farm or Fishing Corporation - Paragraph (a) - Subparagraph (a)(i) | meaning of “actively engaged on a regular and continuous basis” requirement | 152 |
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1.3) - Paragraph 110.6(1.3)(c) | s. 110.6(19) election effected a post-1987 acquisition | 159 |
| Tax Topics - Income Tax Act - Section 70 - Subsection 70(10) - Child | extended meaning of "child" | 158 |
6 October 2008 External T.I. 2008-0271421E5 F - Terres à bois-plan d'aménagement forestier Québec
Work was carried out on some of the woodlots of a taxpayer, with a forest producer's certificate under s. 120 of the Québec Forest Act and also...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 70 - Subsection 70(9) - Paragraph 70(9)(a) | “engaged” requirement in s. 70(9)(a) is satisfied to extent the forest management plan requires no action | 110 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Farming | woodlot, to be a farm, must focus on the fostering of the stand | 95 |
Subsection 73(4) - When subsection (4.1) applies
Administrative Policy
8 February 2018 External T.I. 2016-0670841E5 - Inter-generational rollover of farm property
The transfers of Canadian farming property or of shares of a family farm or fishing corporation or an interest in a family farm or fishing...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 70 - Subsection 70(9) | intergenerational transfer of a farming business can occur where one individual worked on more than one farm | 216 |
| Tax Topics - Income Tax Act - Section 70 - Subsection 70(10) - Share of the Capital Stock of a Family Farm or Fishing Corporation | one individual's work can qualify multiple farming corps | 134 |
87 C.R. - Q.71
Property transferred to a trust solely for the benefit of a minor will qualify for the rollover.
Subsection 73(4.1) - Inter vivos transfer of family farm or fishing corporations and partnerships
Administrative Policy
2013 Ruling 2012-0472721R3 - Inter-vivos share transfer under 73(4) and (4.1)
Rulings that, subject to s. 69(11), s. 73(4.1)(a)(i) and s. 73(4.1)(b) applied to the transfer of shares of Farmco by Individuals 1 and 2 to a...
Paragraph 73(4.1)(c)
Administrative Policy
15 July 2019 External T.I. 2018-0747761E5 F - Application de 73(4.1)
Respecting the consequences of an inter vivos transfer of an interest in a family farm or fishing partnership (for which the s. 73(4.1)(c)...