CRA softens its stance on what constitutes acting in concert

CRA has amended its Folio on the non-arm’s length concept to indicate that "the fact that two or more parties act in a highly interdependent manner (in respect of a transaction of mutual interest) can be an indication of the fact that the parties are acting in concert," whereas the previous version stated that "when there are two distinct parties (or minds) to a transaction, but these parties act in a highly interdependent manner (in respect of a transaction of mutual interest), then it can be assumed that the parties are acting in concert" (emphasis added).  This is responsive to a submission in the CBA/CICA Joint Committee Submission on Income Tax Folio S1-F5-C1, 16 June 2014 that the previous statement did not accord with the jurisprudence (see also Mah and Meredith).

Neal Armstrong.  Summary of S1-F5-C1 under s. 251(1)(c).