Spruce Credit Union – Federal Court of Appeal confirms that choosing the most tax effective transaction which nonetheless still has a primary non-tax purpose does not render it an avoidance transaction

Trudel JA affirmed an analysis of Boyle J. that where a transaction was engaged in primarily for non-tax reasons (in this case, a dividend paid to credit union shareholders because they needed the cash), then the fact that the particular form of the transaction (a dividend) was more tax effective than some other transaction that would accomplish a similar result (e.g., making the payment in proportion to previous premiums paid by them) does not make the transaction into an avoidance transaction for GAAR purposes.

Neal Armstrong.  Summaries of The Queen v. Spruce Credit Union, 2014 FCA 143 under s. 245(3) and under s. 137.1(10)(a).