My family member owes money to the CRA. Can they give their assets to me?

You should be wary of accepting gifts or transfers from those close to you if they owe money to the Canada Revenue Agency for income tax or GST/HST. 

This is because both the Income Tax Act and the Excise Tax Act allow the CRA to trace property transferred without consideration from a debtor to a debtor’s spouse or common-law partner, any individual under 18 years of age, or any person with whom the debtor does not deal with “at arm’s length”.

If you receive a transfer of property from a tax debtor, the CRA can assess you for the lesser of the amount you received (without consideration) or the tax owed by the debtor. It is important to note that the CRA can still assess you under these provisions after a considerable amount of time has passed since the transfer of property. Furthermore, the CRA is not required to have already assessed the tax debtor for their debt at the time of the transfer as long as they owed the tax for that year or a prior year. 

Example:

Carol has a daughter who is purchasing her first home. Carol owes the CRA $50,000 in unpaid income tax, penalties, and interest. Carol gives $20,000 to her daughter for nothing in return (i.e. for no consideration). Under section 160 of the Income Tax Act, the CRA can assess Carol’s daughter for $20,000.

If, instead, Carol gives her daughter $100,000, the CRA can assess Carol’s daughter for $50,000 (the lesser of the tax debt or the amount of the transfer).