If you and your spouse live in Canada and one of you transfers property to the other, directly or indirectly, one of you may have to pay income tax with regard to the property. In the event of a separation or divorce, only the transferee (the person to whom the property is transferred) will have to pay income tax on:

• the income from the transferred property (or property substituted for the transferred property), if the income is attributable to the period during which the transferor and the transferee were living apart further to the breakdown of their relationship;
• a capital gain resulting from the disposition of the transferred property (or property substituted for it), if the disposition took place at a time when the transferor and the transferee were living apart further to the breakdown of their relationship.