The taxpayer, which operated a fishing camp on land leased from the Crown, was unable to obtain the consent of a secured lender to a sale of that business. Accordingly, the taxpayer entered into a form of sublease agreement with the purchasers which provided that the property would be sublet to the lessees for one year at a rental of $10,000 and that the lessees would have the option to purchase the property for $80,000, with the $10,000 rental being applied to the purchase price.
Mr. Fisher accepted the taxpayer's evidence that the transaction was intended to be a sale. Although the purchasers never in fact exercised their option, it was necessary to consider the situation as it initially existed. Accordingly, the $10,000 received by the taxpayer was a capital receipt.
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