http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/107971/index.do 
Brassard v. The Queen (February 6, 2015 – 2015 TCC 29, Bocock J.).
Précis: Victor Brassard transferred property to his brother, Jim, at a time when he owed arrears of income tax. Jim was assessed under subsection 160(1) of the
Income Tax Act (the “Act”) on the basis that the property had a fair market value of $120,600 at the date of transfer and Jim gave consideration of no more than $50,000 for the transfer. Jim attacked both the fair market value of the property and the amount of consideration he paid for it. He also argued that he had destroyed receipts showing work he had done on the property because CRA officials told him there would be no subsection 160(1) assessment. The Tax Court rejected all of Jim’s arguments as not being supported by the evidence adduced.
Decision: This decision dealt with a transfer of land between brothers as a time the transferor owed income tax:
[3] The matter before the Court involves two brothers: the Appellant, Jim Brassard (“Jim”) and the tax debtor, Victor Brassard (“Victor”). In March of 2002, Jim transferred a certain property known as 16065 Grunerud Road, Prince George, British Columbia (the “Grunerud Property”) to Victor. The expressed market value at the time of transfer was $50,000.
[4] During the course of 2003, Jim was assigned or petitioned into bankruptcy and was discharged as a bankrupt in 2004. In 2004, Jim purchased a mobile home worth approximately $25,000. On October 20, 2005, Victor, the owner of the Grunerud Property since the transfer by Jim in 2002, transferred the Grunerud Property back to Jim. Recorded in the actual land transfer document was a fair market value for the property of $50,000.
[5] Unfortunately, at the time of transfer Victor owed the Minister of National Revenue some $49,703.36. As at the assessment date, when the Minister levied the section 160 assessment against Jim the amount of the tax debt, penalties, and interest owing under Part 1 of the Act by Victor to the Minister was $66,264.37 (the “Assessed Tax Debt”).
CRA assessed under subsection 160(1) of the Act on the basis that the land had a fair market value of $120,600 at the date of transfer and Jim gave consideration of no more than $50,000 for the transfer.
Jim’s argument that the land was not worth $120,600 was rejected:
[15] The appraisal conducted by Kathryn Kettner, who is a resident appraiser within the CRA, accurately assessed the Grunerud Property to have a fair market value of $175,000. The Minister in making her assumptions in the Notice of Assessment provided Jim with a $54,400 credit in relation to his mobile home and improvements related thereto on the property. This is demonstrated by the Minister’s assumption that the value of the property and improvements, excluding the mobile home, owned by Victor at the date of transfer was $120,600. The argument that the mobile home on site was included in this value is simply not logical given that it was specifically and advertently excluded by the Minister in the appraisal utilized for the purposes of the section 160 assessment.
[16] With respect to the British Columbia Assessment Authority’s (“BCCA”) appraisal of the Grunerud Property, there was clear evidence adduced before the Court that the appraisal in relation to the transferred property referable to the 2005 transfer date was included in the 2006 BCCA assessment completed one year in arrears. It therefore correctly references land and improvements (excluding the mobile home) having a value of approximately $126,000 in 2005. Moreover, an additional reduction of $5,400 to fair market value had been provided by the Minister which yielded a final 2005 assumed value of $120,600 for the transferred property.
[17] In addition, there was no countervailing evidence offered by Jim with respect to other appraisals undertaken during the 2005 period or at the transfer date which would suggest that the value of the Grunerud Property, excluding the mobile home, was worth anything less than $120,600. Factually, the anecdotal evidence adduced by Jim related to assessments in 1998 and 2002, related to dates when he first acquired and first disposed of the Grunerud Property. It should be noted that at those transfer dates, quite apart from the fact that the appraisals are temporally many years prior, such appraisals did not and could not have possibly accounted for the alleged improvements placed into the Grunerud Property by Jim after 2002, but before the transfer date.
Similarly the Court rejected his arguments that he had given greater consideration for the transfer:
[18] With respect to the second argument that the consideration paid by Jim was greater than $50,000, no evidence of his payment of a mortgage registered on title was offered. With regard to the many thousands of dollars that Jim alleges to have paid with respect to improvements to the Grunerud Property between 2002 and the date of transfer, receipts were produced before the Court which simply do not tally to an amount greater than $13,067.90. In fact, the Court undertook a calculation of those very expenses and determined that of the $13,067.90, it is more probable than not that more than $11,267.00, being the vast majority of those expenditures, related to improvements involving Jim’s mobile home placed on the property in late 2004. As noted, the acquisition price of the mobile home was $25,000 and the Minister added a like amount in respect of improvements related to that mobile home. That $54,400 was then deducted from the assumed market value of the property at transfer date. As such, it appears that a sizeable portion of the amounts reflected in the tendered receipts have been double-counted by Jim.
[19] There was evidence Jim paid Victor $27,000.00 by way of bank drafts around the time of the transfer date for the Grunerud Property. After giving Jim credit for that $27,000.00 and also the $13,067.90 above, and after deducting such sums from the market value of $120,600, there remains a deficiency of consideration equal to the sum of $80,532.10. It is noted by the Court that the amounts suggested by Jim of $27,000 and $13,067.90, as consideration paid for which receipts exist, are well below the $50,000 of consideration credited to him by the Minister in calculating and levying the section 160 assessment. Accordingly, after having given Jim the highest and best weight to his own documentary evidence, the deficiency in paid consideration is in excess of the Assessed Tax Debt raised by virtue of the section 160 assessment. As importantly, the deficiency in consideration is well in excess of the original tax debt owing at the time of transfer, namely $49,703.36.
Finally, the Court rejected his evidence that he had destroyed receipts in connection with the property after being assured by CRA that there would be no subsection 160(1) assessment:
[20] Lastly, the suggestion by Jim that his destruction of other receipts was undertaken to his detriment, based upon assurances by CRA officials that there would be no further procedures with respect to section 160, is simply not supportable. There was no objective evidence raised at trial or recognition by CRA witnesses testifying that any conversations occurred, never mind along those lines. On that basis, Jim’s decision to destroy receipts which he claims would have proven additional expenditures to the Grunerud Property cannot be entertained by the Court as evidence of the existence of the receipts or the quantum of the consideration.
The appeal was dismissed and Jim was ordered to pay $2,500.00 in costs:
[22] In light of the fact that no discoveries were held in this matter and owing to the relatively streamlined fashion in which the litigation was undertaken by the Appellant, costs are awarded to the Respondent, but are fixed in the amount of $2,500.00. Either party shall have a right to make further written submissions to the Court in respect of costs should either party elect to do so within 30 days.