The CRA accepted that the pre-2024 GAAR did not apply where subsection 55(2) was triggered deliberately. Will the amended GAAR apply to such planning? The authors point out that the economic substance test in subsection 245(4.1), if it applies, is…
DAC Investment
The authors discuss R v DAC Investment Holdings Inc., 2026 FCA 35, rev’g 2024 TCC 63. They conclude that, in a GAAR analysis, an overly-broad characterization of a provision or a mere description of its effect will not correctly express its object, spirit and purpose…
Harvard Properties detailed notes
Harvard Properties 2024 TCC 139 per Boyle TCJ General procedure Under appeal A-382-24; A-388-24 “Another Section 160 Tax Avoidance Scam: Harvard Properties” Brian Arnold report 296 Jan 14/25 * Facts The following is a paraphrase of the facts set out…
Accessing stranded ACB ok under GAAR
In 3295940 CANADA INC. v R, 2024 FCA 42, the taxpayer appealed the application of the GAAR to a series of transactions that used ACB in shares of a corporation that the purchaser refused to purchase. The transactions, in effect,…
Deans Knight applied
In R v. MMV Capital Partners Inc., 2023 FCA 234, the Court applied GAAR to a scheme where five of the original shareholders of the taxpayer maintained de jure control but an arm’s length party acquired 99% of the corporation’s…
GAAR changes bad
Subsection 245(3) will be amended so that a transaction will be an “avoidance transaction” if one of its main purposes is to obtain a tax benefit. Many more transactions will be avoidance transactions because tax considerations always play a major…
GAAR object and spirit
The author provides a summary of the detailed analysis undertaken by the Court in Gladwin Realty Corporation v Canada, 2020 FCA 142 to determine the object and spirit of the provisions of the Income Tax Act (Canada) at issue in…
CDA timing and GAAR
If a corporation triggers a capital gain, pays a capital dividend using the resulting CDA balance and then triggers a capital loss that, in effect, offsets the gain, does the GAAR apply? In Gladwin Realty Corporation v R, 2019 TCC…
GAAR to be applied only when benefit realized
The CRA, per Wild v R, 2018 FCA 114, accepts that the GAAR can be applied only after the benefit has been realized. Neal Armstrong summary of Alexandra MacLean, “CRA Audits of Large Corporations – The view from ILBD” November…
Purpose of 84.1
In E Hamelin, “Surplus Stripping: A New Approach?” 18:4 Tax for the Owner-Manager (October 18, 2018), the author notes that the Court in Pomerleau v R, 2018 FCA 129 seemed to treat the one-half portion of a capital gain that…