The appellant appealed assessments under section 160 of the Income Tax Act and section 325 of the Excise Tax Act relating to funds her spouse deposited into their joint bank account while he owed tax debts.
The Tax Court of Canada held that the mere deposit of funds into a joint bank account does not constitute a transfer of property, as the spouse did not divest himself of the funds.
However, a transfer occurred when the appellant subsequently withdrew funds from the joint account for her own use or to pay the mortgage on her solely-owned home.
The appeal was allowed in part, vacating the income tax assessment and reducing the excise tax assessment to the amount actually withdrawn by the appellant.
