In Muir v R, 2020 TCC 8 (informal procedure), a corporation, after selling its dental practice, paid an amount to the controlling shareholder at a time when the corporation owed tax. The Court (Boyle J) found that
(1) that the funds were transferred by the vendor to the appellant upon the sale of the dental practice subject to the requirement that all of the funds be promptly used to refund in-trust amounts to patients and to repay creditors, (2) that this condition was intended and understood by the appellant and the vendor, and (3) that the appellant promptly and fully complied with the condition with respect to the full amount received.
Section 160 did not apply; appeal allowed.
Philip Friedlan and Adam Friedlan “Muir: Applying Section 160 When the Minister’s Collection Powers Have Not Been Stymied” 20:2 Tax for the Owner-Manager (April 2020)
