Search - considered

In rejecting the Crown’s submission that the repair expenditures were not deductible because the unit was not rented out during that year, Masse DJ noted (at para. 23) that “a property does not need to be generating income at every stage of operation in order to be considered a source of income.” ...

D’Auray J below had considered this approach to be unfair and anomalous, since if the company had instead lain in the grass and been assessed by CRA for the unreported GST, CRA would have been required under s. 296(2.1) to allow the (more than) offsetting unclaimed rebate amounts, so that no interest or late-filing penalties could have been assessed. ...

After first concluding that there was no tax benefit (such dividend alternative was not commercially realistic), he also found that there was no avoidance transaction, stating (at para. 308) that the taxpayers “undertook the Transactions to effect the sale of their shares in the subsidiaries to WTC on a tax efficient basis” and that there was “no evidence to suggest that in 2006 the Appellants considered the application of section 160 and took steps to avoid the application of that provision.” ...

CRA considered that the corporation’s invoices did not comply with the last sentence quoted above. ...

In the circumstances of this case, it considered it inefficient and procedurally unfair to do so. ...

These transactions depended in part on the appellants being considered to have acquired units of an income fund ("FMO") from another income fund ("TOM") (which in turn had purportedly acquired the FMO units from an RRSP in consideration for issuing TOM units to it) at a cost equaling the units’ FMV, followed immediately by a distribution to them of capital gains that had been realized by FMO – with that distribution not reducing the ACB of their units by virtue of s. 53(2)(h)(i.1)(A) and (B)((I). ...

These transactions depended in part on the appellants being considered to have transferred the acquired units of an income fund (“FMO”) at a cost equaling the units’ FMV followed immediately by a distribution to them of capital gains that had been realized by TOM – with that distribution not reducing the ACB of their units by virtue of s. 53(2)(h)(i.1)(A) and (B)((I). ...

Such representations will be considered sufficiently precise for purposes of the doctrine of legitimate expectations if, had they been made in the context of a private law contract, they would be sufficiently certain to be capable of enforcement: Mavi at para 69. ...

The estate argued that for these purposes, the consideration received by the foundation for such shares should be considered to be the subsequent cash repayments of $17.7 million rather than the promissory note (which clearly was also a non-qualifying security), so that the estate’s previous donation was deemed by s. 118.1(13)(c) to be of $17.7 million rather than nil. ...

Pizzitelli J considered this discount to be eminently fair to the taxpayers given his finding that, on the valuation date (April 1, 2006), the prospects for a successful IPO were high (and of the founders requiring the taxpayers to sell their shares back at the formula price, quite fanciful). ...