Corina Weigl

The principal residence exemption allows a Canadian taxpayer to shelter the capital gains realized on the sale (or other disposition) of a property that meets the definition of a “principal residence” in the Income Tax Act (Canada). Over the years the rules related to claiming the exemption have been tightened up. For example, up until 1982 where two spouses owned different principal residences, each could claim the exemption over their respective property. This was changed in 1982, such that each family unit can only have one principal residence for a given time period…..

As part of the estate planning process an assessment ought to made of how the income taxes and other liabilities of the client will be met on his or her passing. Often clients will ask whether any of their family members can become liable for their income taxes and other liabilities on their death. The answer is “yes” a beneficiary of an estate who has received property in priority to the satisfaction of the deceased’s liabilities can be called upon to return property received from the estate. This position is subject to the beneficiary having any equitable defenses available to a claim by a creditor or to any statutory protections available…..

We know from Pecore v Pecore, 2007 SCC 17 that when a parent gratuitously transfers title into joint tenancy with the parent and adult child as joint tenants, there is a presumption of resulting trust. Where there is sufficient evidence to prove on a balance of probabilities that the intention of the parent was a true joint tenancy with a right of survivorship, the presumption of resulting trust is rebutted. Even where a true joint tenancy with a right of survivorship exists, a unilateral action by a co-owner may sever the joint tenancy…..