Tax & Trade Blog

A recent case has hopefully clarified a huge issue for so called "derivative assessment" of directors and other person potentially at risk for a corporate taxpayer's tax liability.

Gail Baker v The Queen (2016 TCC 120), illustrates the extent to which s. 160 of the Income Tax Act can apply. The decision shows that a taxpayer’s debts may be imposed on his or her inheritors to the extent of any unpaid tax debts at the time of the transferor’s death, even though tax avoidance was not a motivating factor for a transfer of property and the inheritors were unaware of the potential tax liability involved.