Homburg – Tax Court of Canada finds that the taxpayer failed to establish that family trusts rather than he had de facto control of a public corporation

The taxpayer failed to establish that a public corporation was controlled by the independent trustee of two family trusts rather than by him.

The assumptions pleaded by the Crown did not establish de jure control by the taxpayer, nor did the evidence adduced establish such control. However, the evidence was sufficient to establish that the taxpayer had de facto control of the corporation and its successor. In particular, the circulars issued by the corporation and its successor repeatedly and specifically stated that the taxpayer had indirect control of it through his shareholdings of group companies. Thus, the taxpayer had sufficiently significant influence and control over it to constitute de facto control.

Accordingly, the denial of his s. 110(1)(d) deduction regarding his exercise of stock options that had been granted to him by the corporation was confirmed by Hill J.

Neal Armstrong. Summary of Homburg v. The King, 2025 TCC 162 under s. 251(1)(c).