Who is the true owner and beneficiary

In a November 7, 2025 French Court of Quebec case (Lambert vs. QRA, 2025 QCCQ 6556), the taxpayer was assessed with business income of $284,661 in 2015 related to the sale of a house built on land she owned.

The taxpayer argued that she acted as a nominee for her former spouse, who allegedly carried out the project. She stated that, to reduce taxes as a couple, the land and the house were put solely in her name as she had little income at the time. While the taxpayer was with her former spouse at the time of the transaction, they separated shortly afterwards.

Revenu Québec (RQ) argued that the taxpayer was the project’s true owner and beneficiary.

The house was sold for $545,000, financed with $245,000 in cash and another house valued at $300,000. The second house was then resold for $320,000 after incurring $100,000 in contractor expenses. The divorce agreement between the taxpayer and her former spouse provided that the net proceeds from the sale of the second house would be split 20.2% to the taxpayer and 79.8% to the former spouse.

Taxpayer loses

The Court noted the taxpayer knowingly and actively participated in the project as an owner: the land and property were registered in the taxpayer’s name alone, she applied for and obtained the building permit, she contributed financially to the project and she helped choose material, colour and decor. Further, during the taxpayer’s divorce, she acted as the sole owner and not nominee. Finally, there was no written or other evidence of a nominee arrangement.

The Court found that the tax planning to minimize the couple’s income tax was a deliberate decision; the taxpayer could not later deny ownership. The Court further found that the taxpayer and her former spouse’s divorce agreement had no effect on the tax treatment of the proceeds of the property.

The Court stated that taxpayers should be taxed for what they did, not for what they intended to do. As such, it is not up to the Court nor RQ to apportion the taxable proceeds to the former spouse: it will be up to the taxpayer and her former spouse to take those steps.

The Court ruled that the taxpayer was the true owner of the property and therefore should have reported the full gain on the disposition.