Director’s Liability and Non-Arm’s Length Transfers

The Income Tax Act and the Excise Tax Act allow the Canada Revenue Agency (CRA) to transfer the tax liability of a taxpayer onto third parties. There is a very distinct role for the tax and financial advisor in assisting their clients with this issue. This and more will be discussed at the upcoming Distinguished Advisor Workshop (DAW), with featured guest speakers in Vancouver Jan. 22 and Toronto Jan. 25.

Knowledge Bureau welcomes James Bell, director of Tax Solutions, to the Vancouver DAW session and Khalid Tariq, senior manager, to the Toronto DAW session. Both Bell and Tariq are from Tax Solutions Canada, a member of Farber Financial Group. Farber is a regular sponsor of DAW, one who brings a wealth of information and dynamic speakers to the workshop.

The presentation will examine the current state of tax law when attributing liability onto directors of corporations and non-arm’s length persons like spouses. Recognizing the potential tax consequences arising from asset transfers—including gifting arrangements, dividend sprinkling, and return of capital when tax arrears are due—can help save clients from tax trouble down the road. Moreover, this presentation will also outline defenses available to taxpayers.

“Being a director of a corporation is a very serious responsibility and one that can have serious tax consequences if taken lightly,” said Khalid Tariq.

With the insights of these expert speakers, you will gain an understanding of the powers of the CRA to pursue third parties for tax arrears under section 160, find out how to protect yourself and your clients from third-party assessments from the CRA, and find out what tax advisors need to know about these issues in working with their clients.

“The various tax statutes allow the CRA to circumvent the limited liability of a corporation and go after shareholders and directors. In addition, related third parties can also be held liable if they are deemed to have benefitted from delinquent taxpayers,” Khalid Tariq said.

Join us at the 2016 January Distinguished Advisor Workshop in Winnipeg Jan. 20, Calgary Jan. 21, Vancouver Jan. 22, and Toronto Jan. 25.

Khalid Tariq is a Senior Manager at Tax Solutions Canada (TSC) where he engages his management skills and tax experience to achieve success for clients. He excels at identifying solutions for tax-related problems for businesses and individuals while providing outstanding client service.

James Bell is Director, Tax Solutions at Tax Solutions Canada (TSC) and leads the practice. He is ex-CRA, and brings his outstanding technical knowledge, negotiation skills and deep understanding of the CRA processes and mindset to assist individuals and businesses with tax problems, while being an effective advocate for TSC’s clients.

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