630413NB Inc. – Tax Court of Canada rejects plan for generating ITCs for legal fees

A group of four corporations and their ultimate individual shareholder were unsuccessful in generating input tax credits for GST/HST on legal fees by assigning the rights to the proceeds of the actions to a fifth group company in consideration for that company assuming obligations for the legal fees. Ouimet J found the arrangement to be insufficiently business-like to qualify as a business of the fifth company.

Neal Armstrong. Summary of 630413NB Inc. v. The Queen, 2016 TCC 156 under ETA s. 123(1) – business.