INCOME TAX |
Income Calculation |
Capital Gains and Losses |
Nussey Estate v. Canada
A-687-99
2001 FCA 99, Evans J.A.
30/3/01
3 pp.
On March 1, 1991, sons of late A. W. Nussey transferred to him shares in family-owned business to enable sons to crystallize capital gains, take advantage of certain capital gains exemptions without unduly disadvantageous tax consequences for father--Shareholders' agreement provided on death of shareholder, shares deemed redeemed on day preceding shareholder's death--A. W. Nussey died on April 1, 1991--No redemption of shares transferred to A. W. Nussey in fact occurring during lifetime--Executors invoking redemption provision in order to remove shares from reach of Income Tax Act, s. 70(5) which provides deceased taxpayer deemed to have disposed of all of assets at fair market value immediately prior to death--Tax Court not erring in holding deemed redemption provision in agreement not effecting retroactive disposition of shares day before death--By its terms agreement could only operate once taxpayer had died, by which time Act, s. 70(5) would have applied--Nor was contract underlying transfer of shares void for mistake because not having one of intended tax consequences--Mistake not such as to render contract, transfer null and void from beginning--Income Tax Act, S.C. 1970-71-72, c. 63, s. 70(5) (as am. by S.C. 1973-74, c. 14, s. 19; 1985, c. 45, s. 33).