INCOME TAX
Income Calculation
Dividends
Appeal from decision by Tax Court of Canada (2005 TCC 672) allowing respondents’ appeal concerning assessment under s. 160, Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1 (Tax liability re: property transferred not at arm’s length)—T.C.C. concluding fair market value (FMV) of dividends paid out to respondents by company, of which they were the sole shareholders, was amount transferred minus tax payable by recipient on dividend received—FMV of transferred property should in fact have been evaluated in hands of transferor, and value of that property had to be same when part of net worth of transferor as when part of net worth of recipient—Appeal allowed.
Canada v. Gilbert (A-547-05, A-548-05, 2007 FCA 136, Nadon J.A., judgment dated 4/4/07, 9 pp.)