Words and Phrases - "window dressing"
Chad v. The Queen, 2022 TCC 18
Before denying a motion of the Crown to add an allegation of “window dressing” in its pleadings, Sommerfeldt J stated (footnote 39).
It is my understanding that the ordinary dictionary meaning of the term is “an adroit presentation of facts etc. to give a deceptively favourable impression” (Katherine Barber (editor), Canadian Oxford Dictionary, 2nd ed. (Don Mills: Oxford University Press, 2004), p. 1783); or “[t]he deceptive arrangement of something, usu. facts or appearances, to make it appear more attractive or favorable” (Bryan A. Garner (editor), Black’s Law Dictionary, 10th ed. (St. Paul: Thomson Reuters, 2014), p. 1835). Based on those dictionary meanings, it appears that, while a sham involves deceitfully misrepresenting the nature of a transaction, window dressing would seem to entail deceptively making facts appear better or more favourable than they actually are.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Other Legislation/Constitution - Federal - Tax Court of Canada Rules (General Procedure) - Section 54 | the Crown could not resile from an oral representation that it would not argue “tax shelter” at trial | 506 |
Grenon v. The Queen, 2021 TCC 30
In order that the taxpayer’s RRSP could indirectly invest in operating businesses in which he(and/or tow business colleagues) had a management role, he instigated the formation of various unit trusts (the “Income Funds”) which were intended to be mutual fund trusts on the basis that 171 individuals (the “Investors”) - immediate and extended family members, friends, employees, business associates and others - each subscribed approximately $750 for units of each Income Fund. The taxpayer’s RRSP then invested a large sum (e.g., over $150 million for one of the Income Funds) in subscribing for additional units. The Income Funds invested in underlying LPs carrying on the businesses through an intermediate sub trust and master limited partnership, or more directly.
Smith J sustained assessments of the RRSP under s. 146(10.1) on the basis that the Income Funds did not qualify as mutual fund trusts and, even if they had, their use as “alter egos” for the taxpayer would have been an abuse under GAAR. However, in rejecting CRA arguments based on the “window-dressing” doctrine, he stated (at paras. 402-403):
In the end, although the case law cited above suggests that “window dressing” is “a deception that is not about the legal validity of a transaction, as in sham, but about the taxpayer’s intention for entering into the transaction” (my emphasis), I find that that analysis …is circumscribed by the “economic realities” of the transaction(s) at issue and is limited to an enquiry as to whether “the legal relations were bona fide”: Singleton.
Although the Court has concluded that the Income Funds were not qualified investments for RRSP purposes, and while it certainly finds that the Appellant had ulterior motives in connection with his RRSP, that is not sufficient to reach a finding that the Income Funds were “window dressing”.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 4801 - Paragraph 4801(a) - Subparagraph 4801(a)(i) - Clause 4801(a)(i)(A) | distribution of units that included significant purchases by minors and by adults who did not pay for their own units, was unlawful | 755 |
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | purported establishment of “alter ego” MFTs through which an RRSP could invest in operating businesses was an abuse engaging GAAR | 605 |
| Tax Topics - Income Tax Act - Section 204.2 - Subsection 204.2(1.1) | alleged distribution from non-qualified investment was not an over-contribution | 277 |
| Tax Topics - Income Tax Act - Section 207.1 - Subsection 207.1(1) | non-qualified investments not “included” in annuitant’s income because it was never assessed | 346 |
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) | CRA’s assessing listed taxable RRSPs in a T3GR global return was not of the taxpayer’s (also listed) RRSP /inappropriate reliance in legal opinion on certificate of fact was carelessness | 441 |
| Tax Topics - Income Tax Act - Section 207.2 - Subsection 207.2(3) | CRA’s assessment of Pt. XI.1 shown on the T3GR for all RRSPs of one type did not start the normal reassessment period for the taxpayer’s RRSP since no tax shown for it | 370 |
| Tax Topics - Income Tax Regulations - Regulation 4900 - Subsection 4900(1) - Paragraph 4900(1)(d.2) | distribution was not lawful because the issuer had not complied with the OM exemption, which was the exemption that it had chosen to rely on | 291 |