Technical notes to C-15 (Royal Assent March 26, 2026) appear to take the position that GAAR could apply to an otherwise compliant intergenerational transfer (IGT) if it is really a surplus-stripping arrangement. The Finance comments refer to situations where the conditions for an IGT were met before the disposition to which section 84.1 would otherwise apply “such as a child who already controls the subject corporation prior to the disposition time”. These comments were made against a backdrop of repeated warnings about surplus stripping from both Finance and the CRA.
The authors point out that the SCC GAAR decision in Deans Knight might make IGTs more vulnerable to GAAR even though they comply with the detailed rules in section 84.1.
Simon Pereira and Adam Friedlan “Finance Signals Potential GAAR Scrutiny for Technically Compliant Intergenerational Business Transfers” Canadian Tax Focus 16:3 (August 2026)
