Harding – Tax Court of Canada applies the Chopp principle that a s. 15 benefit is conferred where the shareholder ought to (but did not) know of the benefit

The taxpayer was the sole shareholder and director of a holding company which, in turn, was the majority shareholder of a logging company, which had been paying significant premiums on insurance policies (arranged by the taxpayer’s stepdaughter, a licensed insurance broker) on the life of the taxpayer and of his spouse and for which, at times, the beneficiaries were his spouse and stepchildren.

In confirming the reassessments of the taxpayer under s. 15(1) in the amounts of the premiums, St-Hilaire J stated:

… Chopp confirmed… that a benefit may be conferred without any intent or actual knowledge on the part of the shareholder if the circumstances are such that the shareholder ought to have known. I find that the circumstances in this appeal are such circumstances. The purchase of policies … for which significant premiums were paid and for which there were several changes to the beneficiaries over several years, is not and cannot be treated as a simple bookkeeping error.

Neal Armstrong. Summary of Harding v. The Queen, 2022 TCC 3 under s. 15(1).