Schofield - English Court of Appeal applies Ramsay doctrine (which is irrelevant in Canada, eh?)

The UK taxpayer acquired or wrote four options on the FTSE (both calls and puts) which were designed to produce a capital loss for UK purposes (irrespective of what happened to the index) even though the taxpayer was completely hedged as an economic matter.  The England and Wales Court of Appeal applied the Ramsay doctrine (pre-ordained self-cancelling transactions) to deny the loss.

The Ramsay doctrine (see also Furniss v. Dawson, Craven v. White) has not gained any traction in Canada.  This may be because vacuous transactions of this type should be a quick meal under the general anti-avoidance rule (see Mathew, para. 62; Collins & Aikman (TCC) at para. 109 ("none of these [transactions] involved the degree of artificiality, boldness, vacuity or audacity to rise to the level of being ... abusive tax avoidance using the language of...the GAAR").  Although not as extreme as some of the litigated British schemes, honourary mention might be accorded to the Canadian stock-dividend value-shift schemes (1207192, Triad Gestco, per contra Global Equity).

Neal Armstrong.  Summary of Schofield v. R & C Commrs., [2012] EWCA Civ 927 (CA) under Tax Avoidance.