Words and Phrases - "owner"
26 July 2013 Interpretation 149707
In finding that the rebate was not available where a corporation acquired a new residential complex as agent for an individual, CRA stated:
Paragraph 254(2)(e) requires that ownership of the residential complex be transferred to the particular individual after the construction of the complex is substantially complete. For purposes of paragraph 254(2)(e), the term "ownership" is a reference to legal ownership rather than beneficial ownership of the complex where legal and beneficial ownership are separated. In this case, the documentation submitted indicates that legal ownership of the Property was not transferred to the Individual.
We would also point out that an interest in a residential complex is not itself a residential complex. If it were, the expression "a residential complex or an interest therein" would not be necessary in several places in the ETA in which it appears (such as in paragraphs 254(2)(c) and 254(2)(d), and in section 2 of Part I of Schedule V to the ETA). As the Individual in this case is acquiring only an interest in the Property (i.e., the beneficial interest), the condition in paragraph 254(2)(e), i.e., that ownership of the residential complex transfer to the individual, is not met.
Disher-Winslow Products Ltd. v. MNR, 52 DTC 27 (TAB)
An individual (Edward) was the holder and beneficial owner of substantially all the shares of the taxpayer and his father (Clarence) was the holder and beneficial owner of a substantial portion of the voting shares of a second corporation ("DeWalt"). In addition, Clarence held one share of the taxpayer on behalf of Edward, and Edward held one share of DeWalt on behalf of Clarence. In finding that Edward and Clarence did not "own" shares of both corporations for purposes of s. 36(4)(b)(iii) of the Act as it then read, Mr. Fordham stated (at p. 28):
"In Stroud's Judicial Dictionary, 2nd Edition Ed., p. 1387, it is stated that the owner of a property is the person in whom (with his or her consent) it is for the time being beneficially vested, and who has the occupation, or control, or usufruct of it. In my view, Clarence ... did not have such an interest in the share of the appellant's stock registered in his name and the real owner was Edward ... ."
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Ownership | registered shareholder of share held on behalf of another was not its owner | 174 |
Williams v. The Queen, 2005 DTC 1228, 2005 TCC 558
The taxpayer was found to continue to be the beneficial owner of shares that he transferred to a protective trust of which he was the sole beneficiary and one of the three trustees. The trust deed provided broad powers of management to the trustees, accorded them the discretion to pay out income and capital to the taxpayer at any time and provided that the trust property was to be distributed no later than the 21st anniversary of the trust. Woods, J. noted (at para. 36) that "although the term 'beneficial ownership' is often used in the sense of full ownership except bare legal title", the ordinary meaning of the term is quite broad and includes a sole beneficiary's interest in trust property. This broad meaning was reflected in former s. 248(3)(f) (respecting Quebec properties, and similar to s. 248(3)(e)(iii) of the current Act), which she stated (at para. 43) "is designed to provide harmonization of transactions across the country." Although, in contrast to the terms of the trust at issue in Trans-Canada Investment, the taxpayer here did not have the right to require delivery of the trust corpus at any time, this merely indicated that the taxpayer in that Supreme Court decision may have had ownership, rather than merely beneficial ownership, of the shares held in the trust in that case.
Accordingly, there was no disposition of the shares (on the basis that, under the exclusion in s. (v) of the definition of “disposition,” the transfer of legal ownership occurred "without any change in the beneficial ownership") and, therefore, no taxable capital gain was realized by the taxpayer.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | beneficial owner of shares held in a trust | 141 |