Subsection 159(1) - Person acting for another
See Also
Re City of Kitchener and Regional Assessment Commissioner for Regional Municipality of Waterloo (1978), 23 OR (2d) 190 (Ont. D. Ct.)
A property that a municipality had sold to a developer, and leased back from the developer under a net lease that provided that the property would...
Subsection 159(2) - Certificate before distribution
Cases
Bougie v. The Queen, 90 DTC 6529 (FCTD)
A clearance certificate issued by the Minister in error to the executrix of an estate did not preclude the Minister from seeking to collect unpaid...
Parsons v. MNR, 83 DTC 5329, [1983] CTC 321 (FCTD), rev'd 84 DTC 6345, [1983] CTC 352 (FCA)
Directors who declared (and had the corporation pay) a dividend after the corporation had received a "nil" assessment but before a substantial...
Malka v. The Queen, 78 DTC 6144, [1978] CTC 219, [1978] CTC 219 (FCTD)
The taxpayer, who was a shareholder, director and officer of a company, distributed all the assets of the company to its shareholders without...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 111 - Subsection 111(5) | 123 | |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Shares | 141 |
See Also
Horvath Estate (Re), 2023 ABKB 643
The personal representatives of an insolvent estate proposed to distribute its remaining assets pro rata to all the unsecured creditors in...
Commissioner of Taxation v. Australian Building Systems Pty Ltd (In Liquidation), [2015] HCA 48
On 6 April2011, the creditors of Australian Building Systems Pty Ltd. ("ABS") resolved that it be wound up. On 21 July 2011, the liquidators...
Nguyen v. The Queen, 2011 DTC 1059 [at at 324], 2010 TCC 503
The taxpayers deposited the proceeds from two life insurance policies (which were payable to designated beneficiaries rather than to the estate)...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) | 92 |
Sous-Ministre du Revenu c. Morganti, [1997] R.J.Q. 348 (C.A.)
After a corporation had defaulted under a bank loan secured by a commercial pledge, the bank obtained a seizure before judgment on the pledged...
Pâquet v. MNR, 92 DTC 2151, [1992] 1 CTC 2699 (TCC)
The appellant was the sole director of a corporation which sold its business assets, paid a dividend to the taxpayer and loaned a substantial...
Dauphin Plains Credit Union Ltd. v. Xyloid Industries Ltd., 80 DTC 6123, [1980] CTC 247, [1980] 1 S.C.R. 1182
Pigeon J found (at p. 6130) that "the word 'liquidation' [has] its wide meaning in usual language," so that it included a dsitribution of all the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 153 - Subsection 153(1) - Paragraph 153(1)(a) | receiver-manager included | 25 |
| Tax Topics - Income Tax Act - Section 227 - Subsection 227(5) | 41 | |
| Tax Topics - Statutory Interpretation - Interpretation Act - Section 17 | 38 | |
| Tax Topics - Income Tax Act - Section 88 - Subsection 88(3) | "liquidation" includes forced (and not just voluntary) distribution of all the assets of a company | 298 |
Administrative Policy
30 May 2018 External T.I. 2017-0717981E5 - Clearance certificate for a non-resident
A former resident of Canada (and after her death, her non-resident estate, which had exclusively non-resident beneficiaries) received CPP,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 116 - Subsection 116(3) | non-resident beneficiaries whose capital interests are TCP are required to apply for certificate | 95 |
May 2017 CPA Alberta Roundtable, ITA Q.7
What is the process for multiple representatives (e.g., executors or corporate directors) to each receive a clearance certificate, as required by...
7 October 2016 APFF Financial Strategies and Instruments Roundtable Q. 7, 2016-0651751C6 F - Recovery Tax of Qualified Disability Trust
A testator created a trust for the benefit of his mentally incapacitated son, with the trustees accorded the discretion to distribute income and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 122 - Subsection 122(2) | recovery tax applies to undistributed income in a QDT at the time of the disabled beneficiary’s death | 211 |
| Tax Topics - Income Tax Act - Section 122 - Subsection 122(3) - qualified disability trust | s. 122(1)(c) liability in year of death of disabled beneficiary | 55 |
3 May 2016 CALU Roundtable Q. 5, 2016-0632641C6 - Clearance certificate & GRE rules
While a graduated rate estate may allocate a charitable donation tax credit within 60 months from the individual’s date of death in cases where...
8 August 2014 Internal T.I. 2014-0524971I7 - Distributing Estate Property When Estate is Liable
An estate's property consists solely of a registered education savings plan ("RESP"), which had been transferred to the estate for distribution to...
May 2013 ICAA Roundtable, Q. 6 (reported in April 2014 Member Advisory)
CRA was referred to the huge variability in the times for dealing with and processing clearance certificate "including one file which has been...
27 March 2013 Internal T.I. 2012-0457251I7 - Appn of 159 to executor who distributes property
Respecting whether ss. 159(2) and (3) apply to an executor who distributes property in order to satisfy (a) a debt owed to a credit card company;...
11 October 2012 External T.I. 2012-0432861E5 - Clearance certificate under 159(2)
A partnership "could" be a "taxpayer" for the purpose of s. 159(2) so that a general partner of a limited partnership, viewed as a legal...
14 March 2011 External T.I. 2010-0390311E5 - Section 159 of the Income Tax Act
Where a taxpayer dies with a tax debt larger than the value of his estate, the administrator would be at risk of an assessment under s. 159(3) if...
4 July 2002 External T.I. 2002-0130675 F - Sec. 159 - Payments on Behalf of Others
CCRA indicated that a lawyer acting for the purchaser in an asset purchase was not a legal representative of the vendor for s. 159(2) purposes...
11 January 2002 External T.I. 2001-0112605 F - Section 159 - Payments on behalf of others159(2)
The arm’s length purchaser of a building paid the $1 million purchase price to a notary who, acting on its instructions, used $0.9 million to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Legal Representative | establishment for the purchaser of a trust account to pay vendor’s debts did not render it a legal representative of the vendor | 146 |
10 January 1996 External T.I. 9600885 - CERTIFICATE BEFORE DISTRIBUTION
"A person may be found to be a de facto liquidator, notwithstanding the fact that the formalities of a liquidation under corporate law have not...
8 October 2010 Roundtable, 2010-0373611C6 F - Certificat avant distribution
A trust, whose sole trustee is a corporation, acquired, as its only asset, a property valued at $50 million (the "Property") in consideration for...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 159 - Subsection 159(3) | directors of corporate trustee generally are generally not liable under s. 159(3) | 151 |
5 November 2003 External T.I. 2003-0045085 F - Section 159-Payments on Behalf of Others159(2)
CCRA agreed with the “position that the trustee in bankruptcy exemption in subsections 159(2) and 159(3) would apply only to a person acting in...
7 May 1991 Memorandum (Tax Window, No. 3, p. 29, ¶1249)
Although there is no authority under the Act for RC to assess a dissolved corporation, the governing corporate law may permit action to be taken...
28 March 1991 Memorandum (Tax Window, No. 2, p. 2, ¶1222)
A general partner is a "like person", and will be liable for the payment of income taxes owing by any partner if he distributes property of the...
IT-368 "Corporate Distributions - Clearance Certificates"
Articles
Sklar, "Clearance Certificates Required Before Paying Off Creditors?", Willpower No. 32, 28 August 1997, p. 1.
Wertschek, "The Tax Advisor and Commercial Law: Some Issues", 1993 Conference Report, pp. 22-24: Discussion of potential shareholder liability following a dissolution.
Subsection 159(3) - Personal liability
Cases
Muth Estate, 2019 ABQB 922
After litigation as to whether the separated spouse (Ms. Muth) of the deceased was entitled to receive under his estate, a mediated settlement was...
Canada v. Wesbrook Management Ltd., [1997] 1 CTC 124, 96 DTC 6590
A subsidiary of the taxpayer, which had received a nil assessment and nil reassessment by the Minister for the taxation year in question, was...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(8) | 113 |
Boger Estate v. MNR, 91 DTC 5506, [1991] 2 CTC 168 (FCTD)
After finding against the Minister on other grounds, Joyal J. accepted the Crown's submission that the fact that a clearance certificate has been...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Provincial Law | 27 |
See Also
Mingle v. The Queen, 2022 TCC 34
The taxpayer, and his brother, James, became executors of their father’s estate in 1994. Most of the estate was left to James, and a portion was...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 222 - Subsection 222(5) - Paragraph 222(5)(c) | assessment of executor under s. 159(3) within the s. 222(4) 10-year period restarted the limitation period pursuant to s. 222(5)(c) | 63 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Legal Representative | a de facto executor was a legal representative | 157 |
Goldman v. The Queen, 2021 TCC 13
The taxpayer was designated as the beneficiary of her mother’s RRSP, but was orally told by her mother that this was occurring on the condition...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) | s. 160(1) did not apply to a transfer to an individual qua trustee of a valid oral trust | 483 |
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(2) | trustee had no liability for application of s. 160(1) to transfer to the trust, absent s. 159(3) | 215 |
| Tax Topics - Other Legislation/Constitution - Federal - Tax Court of Canada Rules (General Procedure) - Section 49 - Subsection 49(1) | “taking note” of a fact pleaded by the taxpayer is not a permitted Crown response | 131 |
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(1) | oral instructions, before her death, by mother to daughter re application of the proceeds of her RRSP gave rise to a trust | 208 |
Groscki v. The Queen, 2017 TCC 249 (Informal Procedure)
The appellant was the director of a Macao corporation (EMI Macao) that following an adverse ITA amendment disposed of all its inventory, that had...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Legal Representative | director without liquidator authorization was not legal representative | 88 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(p) - Subparagraph 20(1)(p)(ii) | reporting of bad debt deduction on “net” basis not permitted/specifically-evidenced claims required | 316 |
RMM Canadian Enterprises Inc. v. R., 97 DTC 302, [1998] 1 C.T.C. 2300 (TCC)
A non-resident corporation ("EC") approached a business associate who, along with two other individuals, formed a Canadian corporation ("RMM") to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(3) | 188 | |
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | 235 | |
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | purchaser of cash-rich company without any signifcant separate role did not deal at arm's length | 177 |
| Tax Topics - Income Tax Act - Section 84 - Subsection 84(2) | application of s. 84(2) to sale of cash-rich company to accommodation party who quickly paid cash proceeds therefor | 222 |
| Tax Topics - Treaties - Income Tax Conventions | 96 | |
| Tax Topics - Treaties - Income Tax Conventions - Article 10 | 116 |
Administrative Policy
6 November 2019 Internal T.I. 2019-0798021I7 F - Assessment under 159(3)
An Ontario inter vivos trust with two trustees (the "Legal Representatives"), timely filed its returns for the taxation years up to 2013, and...
14 September 2016 External T.I. 2016-0638171E5 - Liability under section 159
The “Trustee” of a trust holds a portfolio of securities whose fair market value is $125,000 on December 31, 2014. The 2014 return of the sole...
31 March 2014 External T.I. 2013-0513191E5 - Director/Executor liability
What is the potential liability of the executor of an estate where the deceased was the sole shareholder and director of an inactive corporation...
8 October 2010 Roundtable, 2010-0373611C6 F - Certificat avant distribution
A trust, whose sole trustee is a corporation, acquired, as its only asset, a property valued at $50 million (the "Property") in consideration for...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 159 - Subsection 159(2) | repayment of note to unsecured creditor was a distribution | 197 |
Subsection 159(5)
Administrative Policy
15 June 2022 STEP Roundtable Q. 4, 2022-0929911C6 - Death and Tax Payment over 10 Years
The tax payable by a deceased individual respecting certain income and gains under s. 70(2), 70(5) or 70(5.2)) may, pursuant to s. 159(5), be paid...
1 March 2004 External T.I. 2003-0017861E5 F - Bien agricole admissible
Mr. B, who inherited farmland from his father, used the land for farming for a number of years before selling part of it. There was a deemed...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Farm or Fishing Property - Paragraph (a) - Subparagraph (a)(iii) | farm satisfied the qualified farm property definition on the death of an individual who, with his father, had used it in farming | 149 |
Subsection 159(6.1) - Election where subsection 104(4) applicable
Administrative Policy
29 July 2015 External T.I. 2015-0594201E5 - Election under 159(6.1)
Is the s. 159(6.1) election available for a tax liability arising from a deemed disposition of resource property under s. 104(5.2)? CRA...