http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/67014/index.do 
Connolly v. The Queen[1] (February 20, 2014) dealt with an assessment of the taxpayer under subsection 160(1) of the
Income Tax Act[2] in respect of transfers from her common law spouse at a time when he was a tax debtor.
[1] This appeal is from an assessment made under subsection 160(1) of the
Income Tax Act (the “Act”). The Minister of National Revenue (the “Minister”) assessed the Appellant for the amount of $76,884.17 in respect of cheques she received from her common law spouse, Wayne MacVicar, while he was a tax debtor. The cheques were deposited into the Appellant’s bank account between February 10, 2003 and October 31, 2003.
[2] Mr. MacVicar’s tax debt related to the June 10, 2002 reassessment of his 2000 year when the amount of $125,815 was included in his income. As a result of the reassessment, the balance due for that year was $102,059.89.
[3] The Appellant is a business analyst with the province of Nova Scotia. She and Mr. MacVicar have lived together since 1990. Their first home was an apartment which they rented; and, in 1994, they moved into a house which the Appellant had purchased. It was the Appellant’s evidence that the house was in her name only and she alone financed it.
[4] In 1992, 1997 and later in 2004, Mr. MacVicar filed for bankruptcy. Each time his only creditor was the Minister.
[5] In 2002 and 2003, Mr. MacVicar operated a painting business under the name Paradigm Painting. He was also the major shareholder, sole director and sole officer of Guzzler’s Dining Room & Lounge Limited (“Guzzler’s”).
[6] According to the Appellant, Mr. MacVicar had poor credit and he relied on her for assistance to finance his businesses. She knew that Mr. MacVicar had declared bankruptcy in 1992 and 1997[1] and she claimed to have been his banker by extending him credit to pay his business and living expenses. The living expenses were made up of rent which she stated she charged him; food and incidentals; and, a treadmill. The business expenses were payroll expenses; truck and truck insurance payments; payments to Mr. MacVicar’s credit card; and, other miscellaneous business expenses.
[7] It was the Appellant’s evidence that Mr. MacVicar did not have a bank account and she primarily used one of her three accounts to help him with his businesses. She deposited the cheques he received from his businesses into this account and withdrew amounts in cash so he could pay his workers and other expenses. She also had a line of credit which was used only by Mr. MacVicar for his businesses. She leased a truck in her name for Mr. MacVicar to use in his businesses. The truck was used only by Mr. MacVicar. The Appellant stated that the truck was registered in Mr. MacVicar’s name but his cell phone was registered in her name.
[8] As evidence for these expenses and loans, the Appellant submitted a spreadsheet which she created in 2011 at the objections stage of this case. She also referred to bank records which showed withdrawals from and deposits into her bank accounts; cheques made out to cash; and, cheques made payable to Mr. MacVicar. By her calculations, between February 10, 2003 and October 31, 2003, Mr. MacVicar had given her cheques which totalled $76,884.17. However, according to her spreadsheet, he was still indebted to her at the end of October 2003. She calculated his indebtedness to her at the end of October 2003 to be $47,309.07 or $106,890.57, if she included the cash amounts she lent to Mr. MacVicar.
The court found that the appellant’s evidence of advances by her to Mr. MacVicar was not credible and dismissed the appeal:
[34] A loan can be consideration for the purposes of subsection 160(1) but the onus was on the Appellant to demonstrate that a loan existed at the time of transfer, and the fair market value of that loan. In this case, I have concluded from the inconsistencies in the evidence and the lack of contemporaneously made records or receipts that the Appellant has not met the onus.
[35] There was nothing in writing to support that the Appellant made loans to Mr. MacVicar. There was nothing in writing between the Appellant and Mr. MacVicar to document their arrangement. However, this alone would not have been fatal to the Appellant’s case if I had found that she had given credible evidence to support a loan.
[36] I have found that there were inconsistencies in the Appellant’s evidence and there were inconsistencies between the Appellant’s evidence and that of Mr. MacVicar. As a result, I have concluded that the Appellant has not established that a loan existed between her and Mr. MacVicar at the time the cheques were transferred to her. I have also concluded that the Appellant was not credible. My conclusions were based on the following.
…
[41] The Appellant stated that she had kept contemporaneous records on her computer of the amounts she lent to Mr. MacVicar in 2002 and 2003 but she did not bring these records to Court. She alleged that she had destroyed the records.
[42] Additional inconsistencies between the Appellant and Mr. MacVicar were as follows: According to the Appellant, Mr. MacVicar did not have a bank account during the relevant period. However, Mr. MacVicar stated that he had two business bank accounts in 2003. There was no documentary evidence of the two business accounts but he did have a personal bank account. Three of the documents included in evidence were cheques written to the Appellant on Mr. MacVicar’s personal account. The Appellant wrote on her spreadsheet that she charged interest on the amounts she lent to Mr. MacVicar. However, Mr. MacVicar disagreed that interest was charged. The Appellant testified that she made truck payments and paid for the insurance on Mr. MacVicar’s truck. Whereas, Mr. MacVicar testified that Guzzler’s made the payments on the truck. The Appellant stated that Mr. MacVicar paid her rent and his share of the expenses each month. Mr. MacVicar agreed that he paid rent but the parties did not agree on the amount paid. The Appellant did not declare rental income in her tax returns.
[43] In an appeal such as this, when the onus is on the Appellant, she must bring more than guesstimates to support her position. There were too many inconsistencies; no reliable documentary evidence of a loan; and, only her unsupported statement of a loan. The Appellant has not met her onus. It is my view that the Appellant has failed to establish that she gave adequate or any consideration for the amounts transferred to her. The appeal is dismissed with costs to the Respondent.
[1] 2014 TCC 55.
[2] R.S.C. 1985, c. 1 (5th Supp.).