The appellants were assessed under subsection 160(1) of the Income Tax Act in respect of monies they received as designated beneficiaries of their late father's life income fund.
At the time of his death, the father had an outstanding tax liability.
The appellants argued that the transfer occurred when the funds were physically transferred to them, at which point their father was deceased and they were dealing at arm's length.
The Tax Court of Canada held that the transfer occurred at the time of death and was a transfer between persons connected by a blood relationship, who are deemed not to deal at arm's length.
The appeals were dismissed.
