Divorcing Canadian Couple with property in two

Dear Taxman,
I phoned and spoke to Dave and said I would e-mail you the details for
my questions.
1/ Myself and my wife have Canadian and Australian citizenship, we
have been tax residence in  OZ for the past 8 years.
We have also filed tax returns in Canada as Non residents showing all
income from the rents etc.
2/ We have been separated for aprox 4 years and have a division of
matrimonial property agreement in  Australia.
3/ We have agreed that I am to keep the assets in Canada and the wife
to keep the Australian assets. (to do this we need the wife's name
removed from our Canadian properties and I presume a tax clearance
4/ The Canadian assets are: Residential property in Langley (in both
our names) & a commercial property in Surrey in and incorporated
company (wife has 40% class B non voting shares and is the secretary -
the balance are mine)
5/ In Jan 1994 we crystallized the shares in the Ltd company : the
value used at the time was $270,000.00 for me and $180.000 for my
Q 1, Will there be tax to pay and if so at what rate for the wife to
transfer her interest to me in the residential property ? How do we go
about removing her name etc ?
(I plan to keep the house and may move back to Canada at some stage)
The house was appraised at around 240,000.00 when we left Canada and
it became a rental, today's value is around 350,000.00.
Q 2, What do we need to do the transfer her shares from the company ?
(it's valued around 350,000.00 so I presume there will be No capitol
gains tax(existing mortgage is 40,000.00)
Q 3, What is the corporate tax rate with a non res director ? (25% ??)
Kind Regards,
david ingram replies:
Under Canadian Law, if there is a divorce, business assets
traditionally transfer to the other spouse with no tax liability to
the transferring spouse, if he or she transfers it to the other at
their adjusted cost base and (in this case) you accept it at her
This should apply to both the house and the corporation.
This is usually or should be dealt with in the divorce or separation
agreement.  Without reading it, anything I say has no basis and is
just a statement.
If  you want to send it to me, I might be able to answer with more
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321 Fax (604) 980-0325
Email to taxman at centa.com
www.centa.com www.david-ingram.com
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