June 13, 1951

LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

His income would still be $10,000, but I take it that under the section the minister can assess the wife for the income with respect to that portion of the property which had been transferred to her.

Topic:   INCOME TAX ACT
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PC

Agar Rodney Adamson

Progressive Conservative

Mr. Adamson:

I do not think that answers my question. I do not think it is clear at all. Do you mean that if the husband transfers stocks, bonds, a house, or anything else, to his wife and gets no income from them, he still has to pay income tax on them?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

That is correct. That has always been the law. It has been the law for years.

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PC
LIB
PC
LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

There cannot be two taxes. I cited the case where the husband transferred all his property to the wife. Under the law as it stood, while the income would be deemed to be in his hands, there would be nothing out of which the department could collect. Under this amendment, while it will still be deemed to be in his hands, they can collect the tax from the wife who has the revenue producing assets.

Topic:   INCOME TAX ACT
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PC

Lewis Elston Cardiff

Progressive Conservative

Mr. Cardiff:

Would that not lessen the tax he has to pay by $1,000?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

The tax is only paid once. It is not paid twice.

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PC

Lewis Elston Cardiff

Progressive Conservative

Mr. Cardiff:

You cannot collect both from the wife and the husband.

Topic:   INCOME TAX ACT
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

That is correct. The tax is only paid once.

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Section agreed to. Section 18 agreed to. On section 19-Refunds.


PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

The present section 52, subsection 1, provides for the making of refunds even without an application therefor on the part of the taxpayer. The amendments proposed in section 19 of the bill seem to eliminate the provision that no application need be made for the refund. If you look at the provisions of the proposed new subsection 1 of section 52 you will see that the minister

shall make a refund of an overpayment if (a) the return is made within two years from the end of the year, and (b) application in writing for the refund was made by the taxpayer before the expiration of one year, et cetera. You will notice that paragraphs (a) and (b) are cumulative requirements. It seems to me that there is no provision here for the making of a refund apart from application therefor on the part of the taxpayer. Why should that be? I am sure the present section has not worked any injustice against the crown, and I doubt very much if it has worked any administrative hardship on the Department of National Revenue. Therefore why should this limitation be placed upon the scope of the refund provision? It seems to me that from this point of view the present section is infinitely fairer than the proposed new section.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbolt:

I am informed that if there is an overpayment the assessment notice points that out and says that no application for refund is needed. However, if something else comes up within a year after the assessment then an application in writing for the refund must be made by the taxpayer provided the return of income for the year was made within two years from the end of the year.

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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

That explanation does not cover the whole ground of my objection by any means. I do not know whether the minister followed the point I am trying to make. The proposed new section 52, subsection 1, will completely eliminate any right on the part of the taxpayer to a refund, even if otherwise completely entitled thereto, unless he makes application in writing for it. There are two requirements attached to his right to receive a refund. The first is that he must make his return of income within the stipulated period, and he must make application in writing for the refund. In his explanation it seems to me that the minister has not given any reason for departing from the present rule as found in the present section 52, subsection 1, of the act. Surely in cases of this kind what we want to do is to see that anybody who has overpaid his tax receives his refund, and not to set up more requirements which make it very easy for someone to overlook the fact that he must make his application in writing within the stipulated period. Surely what we wish to do is to see to it that everybody who has overpaid receives his refund with a minimum of administrative obstacles put in his way. If we wish to we can strangle this right by applying a whole lot of requirements with regard to the method by which the application for the refund must be made.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

We are standing a number of other sections, and perhaps we might allow this section to stand and I will have a further look at it.

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PC

Gordon Knapman Fraser

Progressive Conservative

Mr. Fraser:

When the minister is looking at that will he ascertain whether, when a taxpayer in making out his income tax form puts at the bottom that he has overpaid so much, that does not constitute his application for refund?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

I think that is the whole point.

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PC

Gordon Knapman Fraser

Progressive Conservative

Mr. Fraser:

He puts at the bottom that he has overpaid so much. That is his application.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

That is the application.

Section stands.

On section 20-Non-profit corporation.

Topic:   INCOME TAX ACT
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June 13, 1951