Insights
Oct 24, 2025
Mackisen
Section 160 CRA Assessments on Spouses and Family 2025 — Protect Your Loved Ones from Hidden Tax Liability
Few Canadians realize how easily a CRA assessment can spread beyond one person. Under Section 160 of the Income Tax Act, the CRA can make your spouse, child, or business partner personally liable for your unpaid taxes—simply because you transferred money, property, or even a shared asset. It doesn’t matter if they had nothing to do with the original debt. In 2025, CRA’s digital enforcement systems automatically track bank transfers, joint accounts, property deeds, and even family loans.
The result: innocent family members can face wage garnishments, frozen bank accounts, or property liens for someone else’s tax bill. It’s one of the most devastating and misunderstood powers CRA has—and it applies automatically, with no statute of limitations.
At Mackisen CPA Auditors Montreal, we defend families and business partners from Section 160 liability. Our tax lawyers and CPA auditors build a legal defense that proves transactions were legitimate, fair-market, and unrelated to tax avoidance. We protect your assets, restore financial independence, and stop CRA from collecting what isn’t owed.
Legal and Regulatory Framework
Income Tax Act (Canada)
Section 160(1): Holds any person who receives money, property, or assets from a taxpayer with outstanding tax debt jointly and severally liable for the lesser of:
The value of the transferred property, or
The transferor’s tax debt.
Section 160(2): Allows CRA to recover unpaid tax directly from the transferee’s income or property.
Section 161(1): Applies daily compounded interest retroactively to the date of the transfer.
Tax Administration Act (Quebec)
Provides Revenu Québec with similar authority under provincial law, allowing them to pursue spouses, relatives, or corporate partners for unpaid provincial taxes.
Mackisen challenges both federal and provincial assessments simultaneously—ensuring no duplication or overreach by CRA or Revenu Québec.
Key Court Decisions
Heavyside v. The Queen (1996): Intent is irrelevant—CRA can apply Section 160 even if the transferee didn’t know of the tax debt.
Yates v. The Queen (2019): CRA must prove the transfer occurred below fair market value.
Bélanger v. The Queen (2021): Transfers between spouses are presumed suspect unless fully documented.
Harder v. The Queen (2023): Courts confirmed that CRA’s Section 160 powers are broad—but valid defenses exist when fair market value is demonstrated.
These rulings show that proper documentation and valuation are your best protection.
Why Section 160 Family Assessments Are So Dangerous
CRA doesn’t need to prove fraud or intent—only that money or property changed hands between a taxpayer and a related person while taxes were owing. Common family situations that trigger Section 160 include:
Spousal property transfers or joint account movements.
Adding a spouse or child’s name to a mortgage or title.
Family loans or shared business ownership.
Gifts of cash, cars, or investments during an outstanding tax balance.
Divorce settlements where assets change hands while one spouse owes taxes.
Once assessed, the recipient becomes personally liable—even if they had no idea the debt existed.
Mackisen’s Family & Spousal Protection Strategy
Case Review: Identify all transactions and determine CRA’s transfer valuation basis.
Fair Market Valuation: Prove that any transfers occurred at full market value, not as gifts or avoidance.
Legal Objection Filing: File a Notice of Objection within 90 days to pause collection and begin formal defense.
CRA Negotiation: Present evidence showing compliance with tax and family law standards.
Asset Protection: Implement legal restructuring and separation of ownership to prevent future exposure.
Our process neutralizes CRA’s claim at its foundation—by proving the transfer was legitimate and not designed to avoid taxes.
Real Client Experience
A Montreal couple faced a Section 160 assessment for $98,000 after a home refinance transfer. Mackisen demonstrated that the transaction occurred at fair market value and secured complete dismissal of CRA’s claim.
A small business owner’s spouse received a notice for $41,000 in her husband’s tax debt. Mackisen proved all account transfers were salary-related and achieved full relief within eight weeks.
Common Questions
Can CRA really make my spouse pay my tax debt? Yes—but only if a transfer occurred while you owed taxes and was below fair market value. Mackisen defends these cases rigorously.
What if the transfer happened years ago? CRA has no limitation period under Section 160—they can assess anytime.
Can I appeal a Section 160 notice? Yes, within 90 days of the assessment. Mackisen files objections and appeals immediately.
How can I protect my family in advance? Keep all transfers at documented fair value and seek professional tax advice before transferring property.
Why Mackisen
At Mackisen CPA Auditors Montreal, we defend not just taxpayers—but families. We’ve overturned countless Section 160 assessments by proving proper valuation, fair transactions, and lack of intent. Our team combines accounting precision with legal expertise to protect spouses, partners, and children from unjust CRA collection tactics.
We believe your family should never pay for someone else’s mistake—and with Mackisen, they won’t.
Call Mackisen CPA Auditors Montreal today for your 2025 Section 160 Family Protection Consultation. The first meeting is free, and your defense begins immediately
