Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
APFF - 1995
Question 21
Subsection 55(2) of the Act
Revenue Canada’s administrative policies and interpretations of subsection 55(2) of the Act have been seriously undermined by two recent rulings:
- C.P.L. Holdings; and
- Nassau Walnut Investments
The courts have placed a great deal of emphasis on the “common sense” that must prevail in interpreting and applying this subsection of the Act and the other provisions of section 55 of the Act.
What position does Revenue Canada plan to adopt with regard to this trend by the courts? Does Revenue Canada plan to publish a revision of its administrative policies as they apply to section 55 of the Act? Does the Department of Finance intend to propose amendments to the Act?
Answer by the Department of Revenue
The decision in C.P.L. Holdings was made on the basis of the facts peculiar to the case. The Department does not consider that this case justifies a change in its position or interpretation with respect to section 55 of the Act. The Department has appealed the judgment in Nassau Walnut Investments.
Answer by the Department of Finance
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