See Also
Mingle v. The Queen, 2022 TCC 34
Wong J rejected the taxpayer’s submissions that he had renounced his executorship shortly after being appointed and that his subsequent acts in jointly (with his brother) transferring estate property to his daughter were performed qua a trustee de son tort and not as an executor – so that he should not have been assessed under s. 159(3) for unpaid estate taxes given their failure to obtain a clearance certificate. Regarding the taxpayer’s second argument, Wong J stated (at para. 28):
[I]f Mr. Mingle was a trustee de son tort (i.e. a person who is not appointed as trustee but whose course of conduct suggests that he be treated as one), I believe that for income tax purposes, he would have still fallen within the definition of “legal representative” which encompasses “any other like person ... dealing in a representative or fiduciary capacity with the property.”
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 159 - Subsection 159(3) | even if the taxpayer had renounced his executorship, his acting as a trustee de son tort would have rendered him liable under s. 159(3) | 290 |
| Tax Topics - Income Tax Act - Section 222 - Subsection 222(5) - Paragraph 222(5)(c) | assessment of executor under s. 159(3) within the s. 222(4) 10-year period restarted the limitation period pursuant to s. 222(5)(c) | 63 |
Groscki v. The Queen, 2017 TCC 249 (Informal Procedure)
Bocock J found that a director was not a “legal representative” of a Macao-incorporated corporation that disposed of all of its inventory (being substantially all of its assets) without CRA providing a s. 159(2) clearance certificate given that the director did not do a lot more than directors normally do and, in particular did not act as a liquidator given that there was no liquidation process authorized by the corporation nor any authority granted to him to act as a liquidator, de facto or otherwise.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 159 - Subsection 159(3) | a director was not liable for failure to obtain a s. 159(2) certificate before his corporation disposed of most of its assets | 328 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(p) - Subparagraph 20(1)(p)(ii) | reporting of bad debt deduction on “net” basis not permitted/specifically-evidenced claims required | 316 |
Administrative Policy
11 January 2002 External T.I. 2001-0112605 F - Section 159 - Payments on behalf of others159(2)
The arm’s length purchaser of a building paid the purchase price to a notary who, acting on its instructions, used a portion to discharge the mortgage and then paid the balance to the vendor, who used the amount to pay down an operating line rather than to pay a debt to CRA. The second situation was similar, except that the purchaser paid the purchase price into a trust account of the vendor’s lawyer subject to a direction that it be paid first to the listed creditors (not including CCRA) before the balance was paid to the vendor.
CCRA indicated that in both situations, the purchaser would not be required to obtain an s. 159(2) certificate given inter alia that “the Purchaser would generally not be a ‘legal representative’ of the [vendor] within the meaning of the definition set out in subsection 248(1).”
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 159 - Subsection 159(2) | payment of purchase price by purchaser to trust account of its lawyer or purchaser’s lawyer for discharge first of non-CCRA debts did not engage s. 159(2) | 192 |