Intra-group loss shifting transactions for FTC utilization purposes were not abusive

CRA found that using somewhat conventional intra-group loss-shifting techniques in order for a Canadian corporation to generate additional income so as to fully claim foreign tax credits (and generate non-capital losses in its Canadian subsidiaries who did not have a foreign tax credit problem) was not abusive.  CRA also noted that its GAAR analysis on loss-shifting transactions was that "since we would normally allow for such losses to be utilized under an amalgamation, two entities who choose not to amalgamate for business reasons, should not be disadvantaged."

Neal Armstrong.  Summaries of 18 December 2012 Memorandum 2012-0461651I7 under ss. 111(1)(a) and 110.5.