Softwood Lumber Products Export Charge Act, 2006 — S-12.55 96
Tax liability re transfers not at arm’s length 96 (1) Where at any time a person has transferred property, either directly or indirectly, by means of a trust or by any other means, to (a) the transferor’s spouse or common-law partner (in this section having the same meaning as in subsection 248(1) of the Income Tax Act ) or an individual who has since become the transferor’s spouse or common-law partner, (b) an individual who was under eighteen years of age, or (c) another person with whom the transferor was not dealing at arm’s length, the transferee and transferor are jointly and severally or solidarily liable to pay under this Act an amount equal to the lesser of (d) the amount determined by the formula A - B where A is the amount, if any, by which the fair market value of the property at that time exceeds the fair market value at that time of the consideration given by the transferee for the transfer of the property, and B is the amount, if any, by which the amount assessed the transferee under subsection 160(2) of the Income Tax Act in respect of the property exceeds the amount paid by the transferor in respect of the amount so assessed, and (e) the total of all amounts each of which is (i) an amount that the transferor is liable to pay under this Act for the reporting period of the transferor that includes that time or any preceding reporting period of the transferor, or (ii) interest or penalty for which the transferor is liable as of that time. However, nothing in this subsection limits the liability of the transferor under any other provision of this Act. Fair market value of undivided interest or right (2) For the purpose of this section, the fair market value at any time of an undivided interest in, or for civil law an undivided right in, a property, expressed as a proportionate interest or right in that property, is, subject to subsection (5), deemed to be equal to the same proportion of the fair market value of that property at that time. Assessment (3) The Minister may at any time assess a transferee in respect of any amount payable by reason of this section, and sections 50 to 63 apply, with any modifications that the circumstances require. Rules applicable (4) If a transferor and transferee have, by reason of subsection (1), become jointly and severally or solidarily liable in respect of part or all of the liability of the transferor under this Act, the following rules apply: (a) a payment by the transferee on account of the transferee’s liability shall, to the extent of the payment, discharge the joint liability; and (b) a payment by the transferor on account of the transferor’s liability only discharges the transferee’s liability to the extent that the payment operates to reduce the transferor’s liability to an amount less than the amount in respect of which the transferee was, by subsection (1), made jointly and severally or solidarily liable. Transfers to spouse or common-law partner (5) Despite subsection (1), if at any time an individual transfers property to the individual’s spouse or common-law partner under a decree, order or judgment of a competent tribunal or under a written separation agreement and, at that time, the individual and the individual’s spouse or common-law partner were separated and living apart as a result of the breakdown of their marriage or common-law partnership (as defined in subsection 248(1) of the Income Tax Act ), for the purposes of paragraph (1)(d), the fair market value at that time of the property so transferred is deemed to be nil. However, nothing in this subsection limits the liability of the individual under any other provision of this Act. Definition of property (6) In this section, property includes money.