Love should not be blind

Here is a true story that illustrates that even in a loving relationship, caution is needed when transfers of property occur.


Under Section 160 of our Tax Code, there is no time limitation on the CRA’s right to assess a transferee of property for taxes owing. Spouses may be divorced or widowed. Business partners may long since have dissolved their ties. Friends may go their separate ways. Notwithstanding any or all of the above, the tax liability remains.


Here is a nightmare scenario illustrating how that can play out. Let’s say we have a couple about to get married. We’ll call them Jim and Jane. In their prenuptial agreement, Jim transfers what will become their matrimonial home to Jane. At that time, Jim has a large amount of income taxes due – which he conveniently doesn’t mention to Jane. A few years into the marriage, Jim becomes ill and cannot carry on with his business. All the financial resources Jane brought into the marriage – considerably more than the value of the home – are spent to keep them afloat. Ultimately, Jim declares bankruptcy and is granted an absolute discharge.


Time passes and Jim and Jane divorce. Jane mortgages the home to satisfy Jim’s rights under family law to half of the matrimonial home’s fair market value. Then out of the blue Section 160 comes back to haunt Jane. Seeking repayment of Jim’s unpaid tax debt, the CRA puts a lien against the home in the amount of its fair market value at the time of transfer to Jane. Now she is stuck with the tax debt – even though Jane was unaware of Jim’s tax liability, even though half of the home’s value has been paid to Jim under the family law rules, and even though her only resource is the mortgaged home.


Jane was not our client. We would have checked with the CRA as to whether Jim owed taxes before doing such a transaction.


Bottom Line: Love should not be blind when assets are being dealt with by a couple contemplating marriage. Caution is the watchword.

The foregoing provides only an overview and does not constitute legal advice. You are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained in the context of your own particular circumstances.

Paul DioGuardi

B.A., LL.B, KING’S COUNSEL, SENIOR COUNSEL

Paul obtained his Law Degree from Queen’s University in 1964.  He is a member of the Bars of Ontario, British Columbia and the Turks and Caicos Islands, a British tax free territory in the West Indies. He has over 50 years of experience and was trained at the Ottawa head offices of Revenue Canada and the Tax Litigation Section at the Department of Justice. Paul has had and continues with an extensive career in various areas of law such as:

  • Tax Law, Civil Assessment Negotiation and Litigation, Criminal Prosecution Defense, Unpayable Tax Debt Solutions, Audits, Tax Amnesty.
  • Corporate and Commercial Law
  • Real Estate
  • Wills and Estates
  • Insolvency and Bankruptcy

Tax Law

DioGuardi offers solutions for tax problems such as:

  • Unreported income
  • Unfiled tax returns
  • Payment arrangements
  • Unpayable tax debt
  • Tax dispute litigation
  • Criminal tax defense

Wills, Estates & Trusts

DioGuardi Law offers these will, estate and trust services for individuals and business-owners:

  • Wills
  • Preparation of trust agreements
  • Powers of attorney
  • Estate administration
  • Probate
  • Representation in estate driven litigation

Real Estate

DioGuardi Law can assist you with all your real estate needs including:

  • Newly constructed/Resale
  • Purchases and Sales
  • Title transfers
  • Leases
  • Private mortgages 
  • Refinancing 
  • Condominiums
  • Vacant land

Tax Debt Relief

When your tax balance is too large to be affordable, DioGuardi Law can protect your home, your cash flow and your financial assets from the Taxman. It is essential that we begin planning a strategy before the CRA registers a lien against your properties or seizes financial accounts, and before you engage with an insolvency trustee.

Business & Tax Planning

DioGuardi Law has the experience to provide:

  • Resident and non-resident corporate restructuring
  • Optimum use of holding corporations
  • Continuity and succession planning
  • Tax-free transfers
  • Losses and ABIL planning
  • Making interest tax deductible
  • Small business planning

Corporate & Commercial Law

DioGuardi Law have represented business clients for the last 50 plus years and have supported their legal requirements on an on-going basis by offering the following services:

  • Incorporations and corporate governance
  • Corporate reorganizations and transactions for the directors and shareholders
  • Negotiation and drafting of agreements, professional corporations, minute book maintenance

Brigitte DioGuardi

B.A., LL.B

Brigitte obtained her Law Degree from the University of Sheffield in the United Kingdom. Upon her return, she qualified for the Bar and was called to the Law Society of Ontario (formerly the Law Society of Upper Canada) in 2002. She was also a member of the Bar of British Columbia and headed up the Vancouver office of DioGuardi Tax Law.  Fluently bilingual in English and French, Brigitte has broad experience in the areas of:

  • Tax Law, Civil Assessment Negotiation and Litigation, Criminal Prosecution Defense, Unpayable Tax Debt Solutions, Audits, Tax Amnesty.
  • Corporate and Commercial Law
  • Real Estate
  • Wills and Estates
  • Insolvency and Bankruptcy

Joyce Bruno

EXECUTIVE LEGAL ASSISTANT

Joyce Bruno has worked as executive legal assistant to Paul Dioguardi for 35 years and continues to offer her expertise and experience to the Dioguardi Law firm. Joyce’s role has evolved over the years and has acquired and developed many skills. She is an invaluable asset in case management and ensures the smooth running of our office.

Paul DioGuardi

B.A., LL.B, KING’S COUNSEL, SENIOR COUNSEL

Paul obtained his Law Degree from Queen’s University in 1964.  He is a member of the Bars of Ontario, British Columbia and the Turks and Caicos Islands, a British tax free territory in the West Indies. He has over 50 years of experience and was trained at the Ottawa head offices of Revenue Canada and the Tax Litigation Section at the Department of Justice. Paul has had and continues with an extensive career in various areas of law such as:

  • Tax Law, Civil Assessment Negotiation and Litigation, Criminal Prosecution Defense, Unpayable Tax Debt Solutions, Audits, Tax Amnesty.
  • Corporate and Commercial Law
  • Real Estate
  • Wills and Estates
  • Insolvency and Bankruptcy