A Simple Family Share Deal That Turned Into a CRA Dispute

Описание: When Kathryn Carter decided to sell her shares in her family’s paving company, she thought it was a simple family transaction. But when her cousin’s holding company purchased those shares, the CRA stepped in — claiming the deal should be taxed as a dividend, not a capital gain.

This real Tax Court of Canada case shows how the CRA applies section 84.1 to family share sales, and what the Court looks for when deciding whether people are truly dealing at arm’s length.

In this video, Amandeep Singh, CPA from Cloudiverse CPAs in Burnaby, walks through the story of Carter v. The King (2024 TCC 71) — explaining:

How a simple family share transfer led to a CRA review

What section 84.1 is and why it exists

How the Court analyzed arm’s-length dealing between family members

Why the judge ultimately found that section 84.1 didn’t apply

What business owners can learn when selling or transferring shares to family

This story is a reminder that even honest, family-based transactions can draw CRA attention if the structure isn’t clearly documented. If you’re planning a share sale or transition within your family business, Cloudiverse CPAs can help you structure it right — before CRA ever asks questions.

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