Adding Relatives to Property Title: Beneficial Ownership

A CRA Technical Interpretation examined whether a taxpayer remained the beneficial owner of her entire residence after adding two daughters to legal title for nominal consideration.

The daughters signed an acknowledgement confirming that the taxpayer did not intend to gift the property to them.

The intention was instead for the property eventually to pass equally among all six of the taxpayer's children.

The taxpayer continued paying all costs associated with the property, and neither daughter lived there.

How CRA Determines Beneficial Ownership

CRA noted that determining beneficial ownership requires considering all relevant circumstances.

Factors may include rights to:

• Possess the property.
• Collect rental income.
• Mortgage the property.
• Transfer title through sale or a will.

Relevant obligations can include:

• Maintaining and repairing the property.
• Paying property taxes.

This list is not exhaustive.

Based on the facts presented, CRA indicated that the taxpayer was likely to remain the beneficial owner throughout her lifetime, meaning that simply adding the daughters to title would not necessarily result in a disposition for tax purposes.

Action: Adding a family member to property title can create tax and legal consequences. Obtain professional advice and clearly document the intention before making the change.