2018-0755471E5 Half-brothers and related persons

Principal Issues: Are half-siblings brothers or sisters that are connected by blood relationship so that they are "related persons" within the meaning of s. 251(2)(a)?

Position: Yes.

Reasons: Previous opinion and jurisprudence. Half-siblings are children that are born to at least one common parent such that they are brothers or sisters that are connected by blood relationship within the meaning of s. 251(6)(a).

Author: Edelson, Marc
Section: 251(2)(a), 251(6)(a)

XXXXXXXXXX                        2018-075547
                            Marc Edelson, LL.B.
Attention: XXXXXXXXXX

July 12, 2018

Dear Sir:

Re:  Paragraph 251(2)(a) and Half-Brothers

This is in reply to your letter of April 17, 2018 wherein you requested our views whether two half-brothers are “related persons” within the meaning of paragraph 251(2)(a) of the Income Tax Act (Canada) (herein, the “Act”) where:

1.    Mr. X is a Canadian resident and Canadian citizen;
2.    Mr. Y is a Canadian resident and Canadian citizen;
3.    Mr. X and Mr. Y were born to the same father but different birth mothers so that they are “half-brothers”.

Unless otherwise stated, all statutory references herein are to the Act.

Our Comments

This technical interpretation provides general comments about the provisions of the Act and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R7, Advance Income Tax Rulings and Technical Interpretations.

Paragraph 251(2)(a) states:

“For the purpose of this Act, “related persons”, or persons related to each other, are

(a) individuals connected by blood relationship ...”

For the purposes of the Act paragraph 251(6)(a) states that:

“... persons are connected by

(a) blood relationship if one is the child or other descendant of the other or one is the brother or sister of the other;”

Individuals who may be considered blood relatives, but do not fit within the foregoing description, will not be considered “related persons” for the purposes of the Act by reason of their blood relationship.

“Blood relationship” or kinship has been accepted to refer to a common ancestor that describes a common blood tie created through either the mother or the father. See, for example, Huntley v. MNR, 2010 TCC 625 at par. 17 and Diktakis vs. The Queen, 2016 TCC 262, at par.s 33 and 34. Also, see Technical Interpretation 9429945.

As such, half-siblings would qualify as being connected by a blood relationship since they are individuals who have a common parent -- a half-sibling refers to a child that is born to either the same mother or father as the other child.

Based on the foregoing, it is our view that the half-brothers you described would be “related persons” within the meaning of paragraph 251(2)(a).

We trust that our comments will be of assistance.

Yours truly,

for Director
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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