Cases
Deans Knight Income Corp. v. Canada, 2023 SCC 16
In the course of a general discussion, Rowe J stated (at para. 55):
A series of transactions also includes “related transactions or events . . ....
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Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | a transaction where a Lossco became subject to control rights similar to de jure control abused the rationale of s. 111(5) | 526 |
Tax Topics - Income Tax Act - Section 111 - Subsection 111(5) | rationale of s. 111(5) addresses where there is a change in the identity of those behind a corporation | 416 |
Tax Topics - Income Tax Act - Section 256 - Subsection 256(5.1) | lender to distressed corporation may have de facto control | 118 |
EYEBALL NETWORKS INC. v. HER MAJESTY THE QUEEN, 2021 FCA 17
Pursuant to a conventional s. 55(3)(a) spin-off transaction, a company (“Oldco”) spun off one of its two businesses to a “Newco,” also...
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Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) | s. 160 did not apply to s. 55(3)(a) where each step involved a value-for-value exchange (including the cross-share redemptions) | 565 |
Tax Topics - General Concepts - Effective Date | price adjustment clause eliminated any possible value discrepancy between the FMV of the transferred property and the consideration therefor | 118 |
Tax Topics - Income Tax Act - Section 84 - Subsection 84(9) | a shareholder whose shares have been redeemed has provided valuable consideration therefor by surrendering its shares | 136 |
Tax Topics - General Concepts - Fair Market Value - Other | note supported only by pref, then note, of a sister had full FMV | 132 |
Louie v. Canada, 2019 FCA 255
From May 15 to October 17, 2009, the taxpayer directed 71 “swaps” under which TSX-listed shares were transferred between her self-directed...
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Tax Topics - Income Tax Act - Section 207.01 - Subsection 207.01(1) - Advantage - Paragraph (b) - Subparagraph (b)(i) | advantages generated in Year 1 from swap transactions continued to produce indirect advantages thereafter | 547 |
Tax Topics - Income Tax Act - Section 207.06 - Subsection 207.06(2) | concerns about future value increases are intended to be addressed by relief provisions | 384 |
Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | taxpayer was directing mind in transactions involving an arm’s length trustee | 137 |
2763478 Canada Inc. v. Canada, 2018 FCA 209
An individual did not sell his shares of an operating company (Groupe AST) directly to a third-party purchaser, but instead transferred them on a...
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Tax Topics - Income Tax Act - Section 245 - Subsection 245(3) | not each transaction in series effecting an estate freeze had that objective | 417 |
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | value shift transactions that permitted the absorption of a real gain by a paper loss abused the basic capital gains regime | 317 |
Tax Topics - Income Tax Act - Section 245 - Subsection 245(6) | individual allegedly suffering double taxation re s. 245(2) denial of capital loss of his corporation failed to apply under s. 245(6) within 180 days | 327 |
Groupe Honco Inc. v. Canada, 2014 DTC 5006, 2013 FCA 128, aff'g 2013 DTC 1032 [at 149], 2012 TCC 305, infra
On January 13, 1999, a newly-incorporated corporation ("New Supervac") was leased the assets of an unrelated corporation ("Old Supervac"), coupled...
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Tax Topics - Income Tax Act - Section 83 - Subsection 83(2.1) | two or three main purposes | 73 |
Copthorne Holdings Ltd. v. Canada, 2012 DTC 5006 [at 6536], 2011 SCC 63, [2011] 3 S.C.R. 721
The taxpayer's shareholders circumvented the rule in s. 87(3), which required that the paid-up capital ("PUC") of a subsidiary corporation...
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Tax Topics - General Concepts - Stare Decisis | high threshold for reversing not met | 193 |
Tax Topics - Income Tax Act - Section 245 - Subsection 245(1) - Tax Benefit | tax benefit illuminated by comparison to reasonable and simpler alternative | 425 |
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | policy of s. 87(3) is to avoid preservation of PUC on parent and sub amalgamation | 372 |
Tax Topics - Statutory Interpretation - Expressio Unius est Exclusio Alterius | implied exclusion principle | 109 |
Toronto-Dominion Bank v. Canada, 2011 DTC 5125 [at 6061], 2011 FCA 221, [2011] 6 CTC 19
A transitional provision in the Act provided that the old s. 55(1) would apply to a transaction if it were "part of a series of transactions,...
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Tax Topics - General Concepts - Transitional Provisions and Policies | 163 | |
Tax Topics - Income Tax Act - Section 112 - Subsection 112(3) | 174 | |
Tax Topics - Income Tax Act - Section 152 - Subsection 152(9) | 117 | |
Tax Topics - Statutory Interpretation - Ordinary Meaning | clear wording | 80 |
Lipson v. Canada, 2007 DTC 5172, 2007 FCA 113, aff'd 2009 DTC 5015 [at 5528], 2009 SCC 1
The taxpayer's wife ("Jordanna") borrowed $562,500 from the Bank of Montreal under an interest-bearing demand promissory note in order to purchase...
Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, [2005] 2 S.C.R. 601, 2005 DTC 5523
In the course of a general discussion of the expression "series of transactions" apearing in ss. 245(2) and (3), the Court noted (at para. 26)...
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Tax Topics - Income Tax Act - Section 245 - Subsection 245(1) - Tax Benefit | tax benefit if taxable income reduction or on basis of comparison to alternative | 132 |
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | policy of CCA provisions relied on cost irrespective of risk mitigation | 211 |
Tax Topics - Statutory Interpretation - Certainty | 131 | |
Tax Topics - Statutory Interpretation - Ordinary Meaning | primacy to ordinary meaning if unequivocal | 96 |
OSFC Holdings Ltd. v. Canada, 2001 DTC 5471, 2001 FCA 260
Although the "common law" meaning of a series of transactions was transactions each of which is pre-ordained to produce a final result, s. 248(10)...
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Tax Topics - Income Tax Act - Section 245 - Subsection 245(3) | significant disparity between tax benefit and commercial return from transaction | 263 |
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | policy against corporate loss trading | 229 |
Tax Topics - Statutory Interpretation - Interpretation Bulletins, etc. | 70 | |
Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions | deeming v. definition provisions | 46 |
See Also
Total Energy Services Inc., 2024 TCC 12
In September, 2007, most of the equity of an insolvent public corporation (“Biomerge”) in CCAA proceedings was acquired by the company...
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Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | an acquisition of an insolvent public company with losses by a SIFT trust was an abuse of s. 111(5) | 367 |
Tax Topics - Income Tax Act - Section 111 - Subsection 111(5) | s. 256(7)(c.1) merely clarified that the acquisition of a public company lossco by a SIFT trust was an abuse of s. 111(5) | 326 |
Agence du revenu du Québec v. Custeau, 2020 QCCA 1496
When a family small business corporation (the “Corporation”) was in financial difficulty, a Quebec regional development fund and affiliated...
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Tax Topics - Income Tax Act - Section 245 - Subsection 245(3) | no avoidance transaction where subsequent utilization of PUC created with PUC-averaging was not contemplated | 404 |
3295036 Canada Inc. v. Agence du revenu du Québec, 2020 QCCA 1435
In October 1996, a Quebec-taxpayer company (“329”) acquired public company shares from its parent, on two separate days, in “Quebec...
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Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) | subsequent years could be reassessed to deny the carryforward of a capital loss reported in a statute-barred year | 216 |
The Trustees of the Morrison 2002 Maintenance Trust & Ors v Revenue and Customs, [2019] EWCA Civ 93
A scheme for the avoidance by three trusts (the “Scottish Trusts”) of capital gains tax on the sale of a bloc representing approximately 2% of...
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Tax Topics - General Concepts - Tax Avoidance | 250 |
3295036 Canada Inc. v. Agence du revenu du Québec, 2018 QCCQ 8100, aff'd 2020 QCCA 1435
On two days in October 1996, the parent company (“Marjad”) of the taxpayer (“3295036”) transferred shares of two public companies, whose...
Louie v. The Queen, 2018 TCC 225, rev'd in part on "advantage" issue (for subsequent years) 2019 FCA 255
From May 15 to October 17, 2009, the taxpayer directed 71 “swaps” under which TSX-listed shares were transferred between her self-directed...
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Tax Topics - Income Tax Act - Section 207.05 - Subsection 207.05(3) | holder rather than trustee liable for advantage tax | 148 |
Tax Topics - Income Tax Act - Section 207.01 - Subsection 207.01(1) - Advantage - Paragraph (b) - Subparagraph (b)(i) | temporal limitation placed on the advantages considered to arise from TFSA swap transactions | 643 |
Tax Topics - General Concepts - Fair Market Value - Shares | use of price range for share valuation was inappropriate where there was a second-by-second market | 185 |
Cameco Corporation v. The Queen, 2018 TCC 195, aff'd 2020 FCA 112
Owen J found (at para. 704) that the concept of a “series” under s. 247(2) should be interpreted narrowly in order to not make it impossible...
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Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(2) | having a Swiss/Lux subsidiary enter into long-term purchase contracts at a somewhat fixed price with third parties and the taxpayer did not engage s. 247(2) | 708 |
Tax Topics - General Concepts - Sham | transactions that were not factually misrepresented were not a sham | 254 |
Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(1) - Transaction | meaning of "arrangement" and "event" | 153 |
Loblaw Financial Holdings Inc. v. The Queen, 2018 TCC 182, rev'd on s. 95(1) - investment business - (a) (arm's length conduct) grounds 2020 FCA 79, in turn aff'd 2021 SCC 51
An issue addressed obiter by C Miller J was whether the renewal by the Barbados subsidiary (GBL) of the taxpayer of its international banking...
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Tax Topics - Income Tax Act - Section 165 - Subsection 165(1.11) | requirement met where Crown knew the nature and quantum of the dispute | 269 |
Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Foreign Bank | CFA qualified as a foreign bank since it was licensed under Barbados law as an international bank | 123 |
Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Investment Business - Paragraph (a) | Barbados-licensed international bank, which used Loblaw funding to invest responsively to Loblaw considerations, conducted an offside non-arm’s length business | 429 |
Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Investment Business - Paragraph (c) | employee equivalents was reduced by employee time described in s. 95(2)(b) | 290 |
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Foreign Exchange | short-term debt securities were inventory because they were the raw material for generating swap income | 130 |
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4.01) - Paragraph 152(4.01)(a) - Subparagraph 152(4.01)(a)(ii) | GAAR is generally a separate matter rather than being subsumed in the allegedly-misused substantive provision | 208 |
Tax Topics - Income Tax Act - Section 245 - Subsection 245(3) | application of GAAR required the occurrence of an avoidance transaction (or series) in non-statute-barred years and the relevant previous year’s avoidance transaction did not occur as part of the series | 512 |
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | use of Barbados sub to engage in proprietary trading for Canadian parent misused the foreign bank exemption, whose purpose was promoting international competitiveness | 336 |
Tax Topics - Income Tax Act - Section 95 - Subsection 95(2) - Paragraph 95(2)(l) | purpose of s. 95(2)(l) exception was to permit non-resident subsidiaries of Canadian banks and dealers to compete internationally | 190 |
Oxford Properties Group Inc. v. The Queen, 2016 TCC 204, rev'd 2018 FCA 30
A corporation (“BPC”), which was mostly owned by a Canadian pension fund (“OMERS”), obtained the agreement of a predecessor of the...
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Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | no abuse in using 88(1)(d) bump to avoid s. 100 after 3-year s. 69(11) period | 557 |
Tax Topics - Income Tax Act - Section 97 - Subsection 97(2) | purpose not to tax underlying recapture on subsequent LP unit sale | 431 |
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(d) | purpose: to push down ACB of shares of sub to qualifying non-depreciable property | 489 |
Tax Topics - Statutory Interpretation - Interpretation Act - Subsection 45(2) | subsequent amendment shed light on scope of previous version | 107 |
Tax Topics - Income Tax Act - Section 100 - Subsection 100(1) | S. 100 operates only on outside basis gain | 290 |
Tax Topics - Income Tax Act - Section 69 - Subsection 69(11) | Parliament provided safe harbour for sales after 3 years | 204 |
Tax Topics - Income Tax Act - Section 98 - Subsection 98(3) - Paragraph 98(3)(c) | purpose: to preserve high outside basis through push down | 293 |
Pièces automobiles Lecavalier Inc. v. The Queen, 2014 DTC 1126 [at 3319], 2013 TCC 310
A Canadian subsidiary ("Greenleaf") of Ford U.S. paid down to $9,750,000 (including accrued interest) a debt of $24,369,439 (plus accrued...
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Tax Topics - General Concepts - Evidence | Canadian tax accountant's testimony on US tax consequences accorded little weight | 152 |
Tax Topics - Income Tax Act - Section 245 - Subsection 245(3) | debt-paydown transactions were avoidance transactions | 268 |
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | avoidance of debt forgiveness rules was abusive | 277 |
MIL (Investments) S A v. The Queen, 2006 DTC 3307, 2006 TCC 460, aff'd 2007 FCA 236
In March 1993 an individual ("Boulle") transferred his shares of a Canadian public junior exploration company ("DFR") to the taxpayer, which was a...
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Tax Topics - Income Tax Act - Section 245 - Subsection 245(3) | 355 | |
Tax Topics - Statutory Interpretation - Retroactivity/Retrospectivity | 91 | |
Tax Topics - Treaties - Income Tax Conventions | 148 |
Canutilities Holdings Ltd. v. The Queen, 2003 DTC 1029 (TCC), rev'd in part 2004 DTC 6475, 2004 FCA 234
Normal course dividends paid by the taxpayers were not paid in contemplation of transactions in which their common shares of a public company were...
Les Placements E&R Simard Inc. v. The Queen, 97 DTC 1328 (TCC)
On September 10, 1988, the taxpayer transferred its assets to a subsidiary ("Alimentation 1988") in consideration for a demand promissory note and...
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Tax Topics - Income Tax Act - Section 55 - Subsection 55(1) - Safe-Income Determination Time | 175 | |
Tax Topics - Income Tax Act - Section 55 - Subsection 55(2) | 111 |
Craven v. White, [1988] BTC 268 (HL)
Lord Jauncey stated:
"If it were appropriate to prepare a formula defining 'composite transaction' in the light of the passages in the speeches in...
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Tax Topics - General Concepts - Tax Avoidance | 203 |
Administrative Policy
7 October 2022 APFF Roundtable Q. 14, 2022-0942191C6 F - Safe-income determination time
A purchaser incorporated a Buyco to acquire the assets of the vendor corporation and then, a few weeks later, the net asset proceeds on the...
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Tax Topics - Income Tax Act - Section 55 - Subsection 55(1) - Safe-Income Determination Time | incorporation of Buyco may trigger safe-income determination time | 383 |
Tax Topics - Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(b) | no need for CRA flexibility regarding safe income issues arising from early formation of a Buyco | 307 |
May 2019 CPA Alberta CRA Roundtable, ITA Session – Q.7
What factors would CRA typically review to assess whether certain transactions are part of the same series; and how important is it that...
2018 Ruling 2017-0683941R3 - Split-up transactions
Mother along with an arm’s length business associate (“Investor”) wanted to use some of the assets of the family business corporation...
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Tax Topics - Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) - Subparagraph 55(3)(a)(ii) | split-up to resolve business differences between daughter and mother, with relevant significant investment of arm's length investor in further transferee company | 758 |
Tax Topics - Income Tax Act - Section 186 - Subsection 186(1) - Paragraph 186(1)(b) | year-end established in middle of cross-redemptions to avoid circularity | 220 |
29 October 2013 External T.I. 2013-0489771E5 F - Internal Reorganization - 55(3)(a)
Three brothers held Corporation A as to 1/3 each and their mother’s estate held all of Corporation B. Following the distribution of the...
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Tax Topics - Income Tax Act - Section 55 - Subsection 55(3.2) - Paragraph 55(3.2)(d) | s. 55(3.2)(d) application to estate distribution of corporation to 3 sibling beneficiaries does not deem them to be related to each other | 248 |
Tax Topics - Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) - Subparagraph 55(3)(a)(v) | relief under s. s. 256(7)(a)(i)(C) or (D) is relevant to s. 55(3.1)(b)(ii), but not to ss. 55(3)(a)(i) to (v) | 227 |
24 October 2012 Internal T.I. 2012-0456711I7 F - Inadmissibilité à la déduction pour GC
Mr. A effected an estate freeze by converting his Class "AA" shares of Opco into Class "F" Opco shares. S. 51(2) has been applied to determine the...
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Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(7) - Paragraph 110.6(7)(b) | potential application of s. 110.6(7)(b) where s. 51(2) applied | 268 |
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4.2) | no retroactive adjustment of capital gains exemption where claimed before the normal reassessment period | 192 |
17 November 2000 External T.I. 1999-0008585 - Winding-up
"A particular transaction will be part of a series of transactions if that transaction is logically and reasonably connected to another...
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Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(c) - Subparagraph 88(1)(c)(vi) | 55 |
23 August 1991 T.I. (Tax Window, No. 8, p. 21, ¶1409)
A preliminary transaction will form part of a series of transactions that includes subsequent transactions if at the time of the preliminary...
9 May 1990 Meeting (October 1990 Access Letter, ¶1474)
"If at the time of the 'butterfly' reorganization the shareholders had formed the intention to sell their shares, and their shares are eventually...
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Tax Topics - Income Tax Act - Section 15 - Subsection 15(1.1) | 39 | |
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | 20 |
3 November 89 T.I. (April 90 Access Letter, ¶1172)
"A preliminary transaction will form part of the series of transactions or events determined with reference to subsection 248(10) if, at the time...
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Tax Topics - Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) | 153 |
Articles
Doron Barkai, Alexander Demner, "Dealing with New Subsection 55(2): Issues and Strategies", 2016 Conference Report (Canadian Tax Foundation), 6:1–56
Avoidance of exclusion if Pt. IV refund not received as part of the series (pp. 6:27-29)
[A]ny dividend paid from Holdco to the shareholder needs...
Justice Marshall Rothstein, "An Overview of the Supreme Court of Canada", Bulletin for International Taxation (IBFD), January/February 2016, p. 20.
Resort to foreign judgments (p. 25)
An example concerns the interpretation of a "series of transactions" under a general anti-avoidance rule...
Benjamin Alarie, Julia Lockhart, "The Importance of Family Resemblance: Series of Transactions After Copthorne", Canadian Tax Journal (2014) 62:1, 273-99.
Extension of common-law series (pp. 76-77)
… Kandev et al. argue that the purpose of subsection 248(10) is merely to bring into the Act the...
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Tax Topics - Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) | 88 |
David M. Williamson, Michael H. Manly, "Subsection 69(11) - Unexpected Problems from Inappropriate Positions", Corporate Structures and Groups, Vol. V, No. 4, 1999, p. 285.
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Tax Topics - Income Tax Act - Section 69 - Subsection 69(11) | 0 |