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Disposition of Property : Tax tips

Deemed Disposition

Changing the use of a capital property from personal to business or vice versa gives rise to a deemed disposition for Canadian Income Tax purposes.

Disposition of Canadian property by non-resident

The disposition of Canadian property by a non-resident of Canada is usually subject to income taxation in Canada, and the purchaser is normally required to withhold funds and remit them to the Canada Revenue Agency, unless a certificate is provided under section 116 of the Canadian Income Tax Act.

A director can avoid liability

A director can avoid liability under the Canadian Income Tax Act if he can demonstrate that he exercised the degree or care, diligence and skill necessary to prevent the failure to deduct, withhold or remit that a reasonably prudent person would have exercised in comparable circumstances.

Limitation on action for director’s liability for unpaid source deductions

Subsection 227.1(4) of the Canadian Income Tax Act provides that no action for director liability for unpaid source deductions of a corporation may be commenced more than 2 years after a director ceased to be a director of the corporation.

"This article provides information of a general nature only. It may no longer be current. It does not provide legal advice nor should it be relied upon. If you have specific legal questions you should consult a lawyer."

David J.Rotfleisch,C.A., J.D.
Tax And Business Lawyer,

David J. Rotfleisch, C.A., J.D.
Rotfleisch & Samulovitch Professional Corporation
Barristers & Solicitors
2822 Danforth Avenue
Toronto, Ontario
M4C 1M1, PH :- 416-367-4222 Fax 416-367-8649