Under section 160, a transferee of property may be assessed for the tax liability of the transferor to the extent that the FMV of the transferred property exceeds the FMV of the consideration given for the property.
In recent case Brown v. Queen (2020 TCC 45), a transfer between spouses not attract the application of section 160 because the spouse accepting the transfer will give full consideration in the form of assuming a corresponding obligation to pay the expenses of the transferring spouse. That intention should be reinforced with written documentation, appropriate documentary evidence, supplemented by accounting showing that the obligation was properly discharged.
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