Boger Estate v. Minister of National Revenue, (1993) 155 N.R. 303 (FCA)

• Judge: Heald, Stone and Robertson, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: May 20, 1993
• Jurisdiction: Canada (Federal)
• Citations: (1993), 155 N.R. 303 (FCA)

Boger Estate v. MNR (1993), 155 N.R. 303 (FCA)

MLB headnote and full text

Her Majesty The Queen (appellant) v. Sharon Boechler, Executrix of the Estate of Alexander Boger, deceased (respondent)

(A-1199-91)

Indexed As: Boger Estate v. Minister of National Revenue

Federal Court of Appeal

Heald, Stone and Robertson, JJ.A.

June 8, 1993.

Summary:

A farmer died testate, leaving a life estate in a piece of land (the home quarter) to his wife, with the residue to be divided equally between his four children. A terminal income tax return was filed claiming a "farm roll-over" of the land and equipment which was left to the children (Income Tax Act, s. 70(9)). The Minister of National Revenue reassessed the terminal return, disallowing the "farm roll-over". The executrix of the estate appealed the disallowance of the "farm roll-over" claim.

The Tax Court of Canada dismissed the appeal. The executrix appealed again.

The Federal Court of Canada, Trial Divi­sion, in a decision reported 46 F.T.R. 241, allowed the appeal, holding that the s. 70(9) roll-over applied to the farm land and e­quipment passed to the children under the farmer's will. The Minister of National Revenue appealed.

The Federal Court of Appeal dismissed the appeal.

Income Tax - Topic 3128

Computation of income - Death of a taxpayer - Transfer of farm property from farmer to child - Section 70(9) of the Income Tax Act allowed a tax-free roll-over of farm land or depreciable property upon the death of a farmer if the property is "trans­ferred or distributed" to the child on or after the farmer's death and the property becomes "vested indefeasibly in the child" not later than 15 months after death - The Federal Court of Appeal discussed the meaning of the phrases "transferred or distributed" and "vested indefeasibly in the child".

Income Tax - Topic 3128

Computation of income - Death of a taxpayer - Transfer of farm property from farmer to child - A farmer died leaving his wife a life estate in certain property and his children the residue of his farm estate - The wife successfully applied for more of the estate under the Family Relief Act (Alta.) - Estate dis­tribution was delayed 29 months - In the far­mer's ter­minal return a "farm roll-over" (Income Tax Act, s. 70(9)) was claimed respecting the property left to the children - The M.N.R. disallowed the roll-over, arguing that the property did not "vest indefeasib­ly" in the children immediately upon or within 15 months of the farmer's death, because of the Family Relief Act applica­tion - The Federal Court of Appeal affirmed the rejection the M.N.R.'s argu­ment - See paragraphs 10 to 13.

Income Tax - Topic 3128

Computation of income - Death of a taxpayer - Transfer of farm property from farmer to child - A farmer died leaving his estate partly to his wife with the resi­due to his children - Before dis­tribution the executrix sold the property - Follow­ing the widow's Family Relief Act appli­cation, the sale proceeds were distrib­uted to the children - In the terminal return a "farm roll-over" (Income Tax Act, s. 70(9)), was claimed respecting the farm property left to the children - The M.N.R. disallowed the roll-over, claiming that because the property was not legally con­veyed to the children and was sold, it was not "transferred or distributed" to the children in accordance with s. 70(9) - The Federal Court of Appeal affirmed the rejection the M.N.R.'s argu­ment - See paragraphs 8, 9.

Words and Phrases

Vested indefeasibly in the child - The Federal Court of Appeal considered the meaning of this phrase as it appeared in s. 70(9) of the Income Tax Act, S.C. 1970-71-72, c. 63 - See para­graphs 10 to 13.

Words and Phrases

Transferred or distributed - The Federal Court of Appeal con­sidered the meaning of this phrase as it appeared in s. 70(9) of the Income Tax Act, S.C. 1970-71-72, c. 63 - See para­graphs 8 and 9.

Cases Noticed:

Hillis and Hillis v. Minister of National Revenue, [1983] C.T.C. 348; 49 N.R. 1 (F.C.A.), refd to. [para. 6].

Commissioner of Stamp Duties (Queens­land) v. Livingston, [1965] A.C. 694 (P.C.), refd to. [para. 8].

Fasken Estate v. Minister of National Revenue, 49 D.T.C. 491, refd to. [para. 9, footnote 2].

Gathercole v. Smith (1881), 17 Ch. D. 1 (C.A.), refd to. [para. 9, footnote 2].

Statutes Noticed:

Devolution of Real Property Act, R.S.A. 1980, c. D-34, sect. 2(1), sect. 3, sect. 9, sect. 10(1) [para. 8].

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 70(6) [para. 6]; sect. 70(9) [para. 1]; sect. 159 [para. 4].

Authors and Work Noticed:

Megarry and Wade, The Law of Real Property (5th Ed.), p. 564 [para. 8].

Counsel:

William Softley, for the appellant;

David P. Jones and Ann de Villars, for the respondent.

Solicitors of Record:

John C. Tait, Q.C., Deputy Attorney Gen­eral of Canada, Ottawa, Ontario, for the appellant;

de Villars, Jones, Edmonton, Alberta, for the respondent.

This appeal was heard on May 20, 1993, in Edmonton, Alberta, before Heald, Stone and Robertson, JJ.A., of the Federal Court of Appeal. The decision of the court was delivered by Heald, J.A., on June 8, 1993.