CRA reiterates prior positions on the new GAAR

CRA reiterated some prior guidance on its interpretation of the GAAR following the introduction of s. 245(4.1), including:

• its affirmation in 2024-1008251I7 of IC88-2 and IC88-2S1;
• as per 2023-0987941I7, it will continue to rule on pipeline-type post-mortem transactions that meet its conditions, but not re plans similar to the example provided in the Explanatory Notes re surplus stripping (Example Jane) or similar plans where an individual shareholder of a corporation proposes to undertake non-arm's length transactions, one of the principal purposes of which is to establish an ACB in order to extract retained earnings; and
• as per 2024-1016011E5, it will not generally apply the current GAAR to transactions solely intended to crystallize pre-June 25, 2024 capital gains.

Neal Armstrong. Summary of 10 October 2024 APFF Roundtable, Q.16 under s. 245(4).