Transfer of Property
Transfer of Property – I may have to declare bankruptcy because I have substantial CRA debt. I am going to try and pay it off but am not sure I can. My income is not what it used to be. Several months ago, I removed my name from the titles of two properties – 1 with my children and 1 with my husband. I did this because my children wished to buy me out of my interest in their property and because I have not lived with my husband for years and felt that the equity in the property belonged to him as he had been paying the debt. We are not legally separated and are on friendly terms, we simply do not live together anymore. If I am unable to pay CRA, can they go after these properties if I declare bankruptcy?
Posted from: Manitoba
Yes, the transfers to your relatives within the one year prior to filing the assignment in bankruptcy are void as against the trustee. Further, regardless of whether you file an assignment in bankruptcy or not the Income Tax Act of Canada allows CRA to raise an assessment against your spouse for the value of the gift or the amount of the tax you owed, which ever is less if you owed money to CRA at the time of the transfer