Coast Capital Savings Credit Union – Tax Court of Canada finds that “sham” is only a sword for CRA, not a shield for the taxpayer

The trustee of RRSPs was duped into purchasing shares of Canadian companies from offshore entities at a price substantially in excess of their value, so that funds of the RRSPs effectively were stripped to offshore accounts. The trustee sought to amend its Notice of Appeal, from an assessment for failure to withhold under s. 116(5), by adding an assertion that the purchase transactions were shams.

In denying this request, V. Miller J stated: "in a tax case, a court will make a finding of ‘sham’, only when it is the Minister who is deceived."

Neal Armstrong. Summaries of Coast Capital Savings Credit Union v. The Queen, 2015 TCC 195 under General Concepts – Sham and s. 116(5).