Page 47 - INSIGHT MAGAZINE_October 2024

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Separation Tax

The matrimonial home, in a nutshell. My family member owes CRA. Can they give their
assets to me?
The matrimonial home is a property that is ordinarily Be wary of accepting large gifts from someone close to you
occupied by spouses as their family residence at the date who has a tax debt. The CRA can follow property from a
of separation. The designation of a matrimonial home person who owes tax to a person who is not dealing with
grants possessory rights to the property. This means when them “at arm’s length”. Examples of non-arm’s length
separating you are entitled to continue to reside in the relationships include spouses, siblings, parents, and children.
matrimonial home. In some cases, depending on how much In these circumstances, federal laws for income tax and
time you’ve spent living in multiple properties, a matrimonial
GST/HST makes the recipient of gifts liable for the tax debt.
home can be more than one residence. For example, if you reside equally at The amount of the liability is the higher of the tax debt, or the amount of
your home and cottage. If you need to leave the matrimonial home for your property received. These rules do not apply if you provided “consideration”
safety or comfort, you do not abandon any financial interest you may have for the gift. For example, a tax debtor repaying a loan to you, or paying you
in the home.
for services rendered, would not make you liable for their tax.
Consult with a family law lawyer to discuss your rights and separation.
If you or your family member owes a large CRA debt, you may wish to consult
with a tax lawyer or accountant to determine your best options.

Nivala Persad‑Maharaj , B.A., LL.B., LL.M. (she/her) Ben Grant

245 Hanlon Creek Boulevard, Unit 102, Guelph, ON N1C 0A1 245 Hanlon Creek Boulevard, Unit 102, Guelph, ON N1C 0A1
website: www.svlaw.ca email: npersadmaharaj@svlaw.ca phone: (519) 837‑2100 ext 290 website: www.svlaw.ca email: bgrant@svlaw.ca phone: 226-971-2398

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