Income Tax Act — I-3.3 160
ion 160(1) to pay any amount with respect to any income from, or gain from the disposition of, the property so transferred or property substituted therefor, and (ii) for the purposes of paragraph 160(1)(e), the fair market value of the property at the time it was transferred shall be deemed to be nil, and (b) in respect of property so transferred before February 16, 1984, where the spouse common-law partner would, but for this paragraph, be liable to pay an amount under this Act by virtue of subsection 160(1), the spouse’s or common-law partner’s liability in respect of that amount shall be deemed to have been discharged on February 16, 1984, but nothing in this subsection shall operate to reduce the taxpayer’s liability under any other provision of this Act. Anti-avoidance rules (5) For the purposes of subsections (1) to (4), if a person (referred to in this section as the “transferor”) has transferred property either directly or indirectly, by means of a trust or by any other means whatever to another person (referred to in this section as the “transferee”) in a transaction or as part of a series of transactions (a) the transferor is deemed to not be dealing at arm’s length with the transferee at all times in the transaction or series of transactions if (i) at any time during the period beginning immediately prior to the transaction or series of transactions and ending immediately after the transaction or series of transactions, the transferor and transferee do not deal at arm’s length, and (ii) it is reasonable to conclude that one of the purposes of undertaking or arranging the transaction or series of transactions is to avoid joint and several, or solidary, liability of the transferee and transferor for an amount payable under this Act; (b) an amount that the transferor is liable to pay under this Act (including, for greater certainty, an amount that the transferor is liable to pay under this section, regardless of whether the Minister has made an assessment under subsection (2) for that amount) is deemed to have become payable in the taxation year in which the property was transferred if it is reasonable to conclude that one of the purposes for the transfer of property is to avoid the payment of a future amount payable under this Act by the transferor or transferee; and (c) the amount determined under subparagraph (1)(e)(i) is deemed to be the greater of (i) the amount otherwise determined under that subparagraph without reference to this paragraph, and (ii) the amount determined by the formula A − B where A is the fair market value of the property at the time of the transfer, and B is (A) the lowest fair market value of the consideration (that is held by the transferor) given for the property at any time during the period beginning immediately prior to the transaction or series of transactions and ending immediately after the transaction or series of transactions, or (B) if the consideration is in a form that is cancelled or extinguished during the period referred to in clause (A), (I) the amount that is the lowest of the amount determined in clause (A) and the fair market value during the period of any property, other than property that is cancelled or extinguished during the period, that is substituted for the consideration referred to in clause (A), or (II) if there is no property that is substituted for the consideration referred to in clause (A), other than property cancelled or extinguished during the period, nil. [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] R.S., 1985, c. 1 (5th Supp.), s. 160; 1998, c. 19, s. 186; 2000, c. 12, s. 142, c. 19, s. 46, c. 30, s. 170; 2007, c. 29, s. 23; 2013, c. 34, ss. 16, 141, 313; 2014, c. 39, s. 57; 2018, c. 12, s. 26 2022, c. 19, s. 38 2024, c. 15, s. 50 2024, c. 17, s. 80 2026, c. 3, s. 75