Moving Assets In Tax Disputes? Think Again!

When a taxpayer is assessed by the Canada Revenue Agency ("CRA"), the instinct to "do something" can be overwhelming. One of the most common reactions is to start moving assets to related parties – for example to spouses or children – in the hopes of keeping them out of the CRA's reach while the tax dispute plays out.

A recent Tax Court of Canada ("TCC") decision shows why this instinct is a bad idea, and is a lesson for anyone trying to sidestep tax problems: what one does after the fact can often make things worse for all involved!

Gill v. The King

In Gill v. The King, 2026 TCC 18, a husband and sole homeowner (the "Husband") was assessed by CRA for an outstanding income tax liability of approximately $1 million. While he was dealing with that, he transferred 99% of his ownership interest in the family home to his wife and son, who each paid only $1 for the transfer (the "Wife" and "Son").