Non-arm's Length Transfers

Non arm’s length transfers are among the most scrutinized and technically demanding areas of Canadian tax law. When property, shares, or business interests are transferred between related individuals or connected entities, the Income Tax Act imposes strict rules to prevent income shifting, surplus stripping, and unintended tax deferral. For CPA professionals, missteps in this area can result in immediate tax consequences, double taxation, attribution issues, or costly CRA reassessments. This course provides a comprehensive and practical examination of non arm’s length transfers in both personal and corporate contexts. Participants will explore the statutory framework under subsection 251(1) and related provisions, gaining clarity on how relationships are defined and how the CRA determines whether parties are dealing at arm’s length. The program examines fair market value deeming rules under subsection 69(1), attribution rules under sections 74.1 and 74.2, surplus stripping restrictions under section 84.1, and the application of anti avoidance provisions including GAAR and section 160. Special emphasis is placed on real world planning scenarios, including family property transfers, intergenerational business succession, estate freezes, corporate reorganizations, and spousal transfers under subsection 73(1). The course also addresses double taxation risks that arise when fair market value is imposed on the transferor but the recipient inherits a reduced adjusted cost base. Participants will learn how and when to apply rollover provisions under sections 73, 85, and 86, how to structure transactions to preserve tax deferral, and how to avoid common traps that can undermine intended outcomes. By the end of this course, participants will be equipped to identify non arm’s length relationships, assess tax exposure, apply rollover mechanisms correctly, and structure compliant, defensible transactions. The program is designed to strengthen both technical knowledge and practical judgment in an area that directly impacts family wealth planning, corporate restructuring, and long term tax efficiency. This course forms part of the Canadian Tax Mastery Certificate, the Certificate in Personal and Family Taxation, the Corporate Reorganizations and Planning Certificate, and the Estate and Succession Planning Certificate.