Purpose

Table of Contents

Cases

Bastion Management Ltd. v. The Queen, 95 DTC 5238 (FCA)

Before finding that the inventory allowance was not available to a commodities future trader who purchased bullion shortly before its year-end on a hedged basis, then reversed its position immediately after its year-end, Linden J.A. stated (p. 5241):

"The provision was not enacted as an incentive for taxpayers to arrange their affairs so as to gain a tax benefit, but to aid those whose affairs had already been arranged in a particular way that led to an unfair tax disadvantage."

See Also

DMWSHNZ Ltd. v. Commissioners for Her Majesty's Revenue and Customs, [2015] BTC 32, [2015] EWCA Civ 1036

purposive approach entails checking whether overall effect of transaction answers the statutory description

Lewison LJ stated (at paras. 20, 50):

The parties were largely content to rely on the discussion in Barclays Mercantile Business Finance Ltd v Mawson [2004] UKHL 51, [2005] 1 AC 684… . Lord Nicholls… said at [32]:

"The essence of the new approach was to give the statutory provision a purposive construction in order to determine the nature of the transaction to which it was intended to apply and then to decide whether the actual transaction (which might involve considering the overall effect of a number of elements intended to operate together) answered to the statutory description.

I do not believe that the approach to interpretation of taxing statutes laid down by Barclays Mercantile Business Finance Ltd v Mawson with its insistence on a realistic view of the facts leaves any scope for angels, pinheads or scintillae temporis.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 61-80 - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) repaid notes not disposed of to issuer 279