Hi all. I have clients that have been married 40+ years and originally purchase their home together. When the property was purchased only the wife was listed on title. Last year they added the husband to the deed for estate planning purposes. The house was and still is their principle residence for all years and neither have owned another residence since the date of marriage. Would this count as a “deemed disposition” of half the residence for the wife and therefore need to be reported on the T2091 or am I overthinking the issue. Thanks in advance for any response.
The first question you should ask them is who is the beneficial owner.
Who is on title does not determine whether there is a deemed disposition.
If only the wife is the beneficial owner, and remains the beneficial owner even after the husband is put on title, their wouldn’t be a deemed disposition.
In this case you would now, for 2023, have to file a bare trust return.
If the beneficial ownership always was 50/50 there is no deemed disposition either. Neither is there a bare trust.
Thanks for the reply. They are both theoretically owners and in reality always have been. They both purchased it and contributed to the mortgage and upkeep. They were advised to leave the husband’s name off the title when they bought the place so the property wouldn’t be one of “his assets” if he was ever sued due to the fact he had a small excavating business.
Since they both originally purchased the property, wouldn’t the wife be deemed to have been holding the husband’s interest in trust for him until he actually went on title? If so, a T3 return could be required.
No, I think not. He had what I think is called “intentional ownership” of the property along with his wife.
For this particular case I don’t think there is T3 return requirement since they are now on title as of Dec31/23.
But I never thought about @kevin’s argument.
I wish the government would be more clear about this T3 requirements change.
Yes, it would be nice if CRA was clearer regarding whether a T3 is required or a half disposal of the PR designation on the wife’s.
What a mess all these disclosure requirements are causing. You have 2 options. Take one of the positions and move on:
- disposition of 50% ownership and file the T2091
- the husband had beneficial ownership and the wife was holding his interest all these years in which case it’s a trust. A T3 would be required but since title was transferred prior to dec 31, that would mean the trust was “wound up” and had a deemed year end prior to Dec 31st. The new trust rules are only in effect for trusts with year ends after Dec 30. So you’re good.
I don’t believe #1 is right.
Transfer of Title does not in and of itself cause a disposition.
See this technical interpretation: 2016-0647461E5 Beneficial Ownership | Video Tax News
CRA normally looks at beneficial ownership. https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-1-individuals/folio-3-family-unit-issues/income-tax-folio-s1-f3-c2-principal-residence.html#p2.79