Subsection 237.1(1) - Definitions
Promoter
See Also
Krumm v. The Queen, 2020 TCC 7
The taxpayer acquired a 50% interest in software after being provided with a valuation report (prepared by a Toronto firm and provided to it by...
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| Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(1) - Tax Shelter - Paragraph (b) | tax shelter rules applied on the private purchase of property described as Class 12 available-for-use property | 374 |
Administrative Policy
6 November 1991 T.I. (Tax Window, No. 13, p. 18, ¶1589)
Normally, where a partnership is created with a small number of members, all of whom are involved in its organization, statements or...
88 C.R. - F.Q.14
A lawyer or accountant who advises the organizer of a tax shelter normally would be included in the definition of a promoter.
88 C.R. - Q.63
Where an investor resells an interest in a tax shelter that was acquired prior to the requirement for an identification number, the investor will...
Tax Shelter
Cases
Canada v. O’Dwyer, 2013 DTC 5156 [at 6369], 2013 FCA 200
The Minister imposed over $2 million in penalties against the taxpayer in respect of the sale of partnership units constituting an alleged tax...
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| Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(7.4) | reply must explain specific basis on which a penalty was imposed | 281 |
Jevremovic v. Canada, 2008 DTC 6263, 2007 FCA 125
Business losses and investment tax credits allocated to an accountant ("Maege") and chemical engineer ("Jevremovic") by an alleged partnership...
Canada v. Baxter, 2007 DTC 5199, 2007 FCA 172
Before going on to find that the purchase by the taxpayer (with others) of a non-exclusive, limited-use day-trading licence was the acquisition of...
See Also
Seica v. Agence du revenu du Québec, 2021 QCCA 1401
What had been found by the Court of Quebec to be a tax shelter entailed the sale by a corporation (“Prospector”) to investors, including the...
Lee v. Agence du revenu du Québec, 2020 QCCQ 780, aff'd sub nomine Seica v. Agence du revenu du Québec, 2021 QCCA 1401
A tax shelter, for the initial (2003/2004) years assessed by the ARQ, entailed the sale by a corporation (“Prospector”) to over 200 investors...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(ii) | interest on limited recourse notes that could be extinguished through the surrender of the limited recourse asset was deductible | 226 |
| Tax Topics - Income Tax Act - Section 143.2 - Subsection 143.2(6) | limited recourse debt eliminated CCA claims | 151 |
Murji v. The Queen, 2018 TCC 7 (Informal Procedure)
The promotional materials of Strategic Gifting Group (“SGG”) contemplated that participants would make a cash donation to a participating...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts | no intent to impoverish | 230 |
| Tax Topics - Income Tax Regulations - Regulation 3501 - Subsection 3501(1) - Paragraph 3501(1)(h) | the cash portion of a donation made to a charity was reduced by the fees paid by it to the tax shelter promoter | 234 |
Gleig v. The Queen, 2015 TCC 191 (Informal Procedure)
The taxpayers entered an arrangement with a corporation ("Blue Hill") in order to deduct Canadian resource expenditures from income:
- the...
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| Tax Topics - Income Tax Regulations - Regulation 3100 | notes were prescribed benefit where no intention to demand payment | 74 |
Malo v. The Queen, 2012 DTC 1214 [at 3588], 2012 TCC 75 (Informal Procedure)
The taxpayer's purchases of tree seedlings that were being planted at a Costa Rican tree plantaition constituted a tax shelter on the basis of ...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Inventory | 102 | |
| Tax Topics - Income Tax Act - Section 3 | 159 | |
| Tax Topics - Income Tax Act - Section 9 - Timing | 102 |
Dagenais v. The Queen, 2008 DTC 2830, 2006 TCC 209 (Informal Procedure)
Interests in partnerships were tax shelters given that the investors expected an immediate deduction of 100% of their investment and only...
Maege v. The Queen, 2006 DTC 3193, 2006 TCC 117, aff'd supra
In finding that the taxpayer's investment in a partnership was a tax shelter notwithstanding that she did not receive any representations as to...
Administrative Policy
10 January 2014 CRA News Release "
//news.gc.ca/web/article-en.do?mthd=index&crtr.page=1&nid=808689&utm_source=mediaroom&utm_medium=eml">Canada Revenue Agency continues its...
"The Canada Revenue Agency: protecting Canadians from gifting tax shelter schemes" CRA News Release, 30 October 2012
CRA announced that it will put on hold the assessments of any 2012 returns for individuals claiming credits in respect of a gifting tax shelter. ...
Income Tax Technical News, No. 41, 23 December 2009 Under "Definition of 'Tax Shelter' - Subsection 237.1(1)
"The Maege Decisions ... do not represent a departure from the requirement that statements or representations be made in connection with the...
Income Tax Technical News, No. 41, 23 December 2009 Under "Definition of 'Tax Shelter' - Subsection 237.1(1)
6 October 2006 Roundtable, 2006-0197051C6 F - Abri fiscal: Don de valeurs mobilières
Can securities described in s. 38(a.1) be property acquired under a tax-sheltering gifting arrangement when they are the subject of a charitable...
4 July 1997 External T.I. 9707565 - TAX SHELTER - FRANCHISE
Where a franchisor represents that a franchisee will have annual net income from the business but also makes a representation that the franchisee...
3 December 1990 T.I. (Tax Window, Prelim. No. 2, p. 21, ¶1057)
Discussion of measurement of 4-year period and of "cost".
90 C.P.T.J. - Q.23
The amount of loss represented to be deductible for purposes of s.a(i) includes capital losses, non-capital losses and allowable business...
90 C.R. - Q.53
Interest expense incurred on money borrowed to buy a partnership unit would be an amount deductible "in respect of" the partnership interest....
23 April 1990 T.I. (September 1990 Access Letter, ¶1434)
Where the partnership is among a small number of partners where the individuals organizing it are also the only partners, there would not normally...
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| Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(6) | 29 |
26 February 1990 T.I. (July 1990 Access Letter, ¶1343)
The cost to an investor is determined in accordance with GAAP including, in the case of a limited partnership interest, any loans or other...
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| Tax Topics - Income Tax Regulations - Regulation 231 - Subsection 231(6) | 79 |
25 January 1990 T.I. (June 1990 Access Letter, ¶1282)
Interest paid on the loan contracted by the purchaser to finance the acquisition of his share of the shelter, or to make a capital contribution...
6 December 1989 T.I. (May 1990 Access Letter, ¶1235)
Interest on money borrowed to acquire a limited partnership interest or to provide capital to that partnership will be considered to be a...
18 September 89 T.I. (February 1990 Access Letter, ¶1126)
The "cost" of the property will include the purchase price, acquisition costs and deemed adjustments.
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| Tax Topics - Income Tax Regulations - Regulation 231 - Subsection 231(6) | 37 |
89 C.R. - Q28
Interest and other expenses incurred by the investor personally but which are represented to be deductible in computing income or taxable income...
88 C.R. - Q.65
Since s.a(i) refers to a calculation projected by the tax shelter promoter and not the investor, financial counselling fees incurred by the...
Articles
Shane Onufrechuk, Warren Pashkowick, "Tax Considerations of Major Construction Projects", 2014 Conference Report, Canadian Tax Foundation, 10:1-35.
Sale of interest in LNG project potentially a tax shelter (p. 10:25)
[A] proponent of a major construction project seeks to sell all or a portion...
Ewens, "Tax Shelter Analysis", The Taxation of Corporate Reorganizations, 1996 Canadian Tax Journal, Vol. 44, No. 4, p. 1207 and Vol. 44, No. 5, p. 1486.
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| Tax Topics - Income Tax Act - Section 143.2 - Subsection 143.2(1) - Tax Shelter Investment | 0 |
Paragraph (b)
See Also
Krumm v. Canada, 2021 FCA 78
The taxpayer acquired a 50% interest in software after being provided with a valuation report that included a tax opinion indicating that the...
Krumm v. The Queen, 2020 TCC 7
In 1997, Mr. Krumm, after receiving a valuation report from a Toronto valuation firm, purchased a 50% interest in computer application software...
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| Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(1) - Promoter | provision of valuation report was sufficient to render vendor in private sale a promoter | 155 |
Articles
John Tobin, "Infrastructure and P3 Projects", 2017 Conference Report (Canadian Tax Foundation), 10:1-31
P3 project likely flunks the mathematical test at financial close given that costs not yet incurred (p. 19:16)
In regard to the investment in the...
Subsection 237.1(5)
Cases
Canada v. Scheuer, 2016 DTC 5011 [at 6551], 2016 FCA 7
The taxpayers, who participated in the same gifting tax shelter as Ficek, sued CRA for negligence in issuing a tax shelter registration number to...
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| Tax Topics - General Concepts - Negligence, Fiduciary Duty and Fault | performance of statutory duties not giving rise to private law duties of care | 263 |
Subsection 237.1(2) - Application
Administrative Policy
88 C.R. -"Tax Reform and Tax Administration" - "Shelter Reporting"
An application by one promoter for a tax shelter discharges any other promoter for the same shelter from the obligation to make an application.
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|---|---|---|
| Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(4) | 20 |
Articles
Donald H. Watkins, "The Tax-Shelter Rules: An Update", 1998 Conference Report, c.5.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 143.2 - Subsection 143.2(6) | 0 | |
| Tax Topics - Income Tax Regulations - Regulation 231 - Subsection 231(6.1) | 0 |
Subsection 237.1(4) - Sales prohibited
Administrative Policy
23 February 1990 Memorandum (July 1990 Access Letter, ¶1344)
Discussion of proposed revisions to IC 89-4, para. 6, 7.
88 C.R. -"Tax Reform and Tax Administration" - "Shelter Reporting"
Preliminary promotions would not offend this provision provided that no actual sales are concluded before the identification number is issued.
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| Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(2) | 24 |
88 C.R. - Q.64
Where a taxpayer acquires a tax shelter before the Minister has issued an identification number for the tax shelter, RC will not deny that the...
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| Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(6) | 16 |
Subsection 237.1(6) - Deductions and claims disallowed
See Also
Bandi v. The Queen, 2013 DTC 1192 [at 1032], 2013 TCC 230 (Informal Procedure)
The taxpayer participated in a donation scheme whose particulars reflected numerous differences with the program described in the promoters' s....
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|---|---|---|
| Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts | 255 |
Administrative Policy
23 April 1990 T.I. (September 1990 Access Letter, ¶1434)
The provisions of ss.237.1(4) and (6) only apply to tax shelters in respect of which a promoter has not been required by s. 237.1(2) to apply for...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(1) - Tax Shelter | 58 |
88 C.R. - Q.64
If an identification number subsequently is obtained, RC will take the necessary corrective action within limits.
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|---|---|---|
| Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(4) | 39 |
Subsection 237.1(7) - Information return
Administrative Policy
IC 89-4 "Tax Shelter Reporting"
Subsection 237.1(7.4) - Penalty
Cases
Canada v. O’Dwyer, 2013 DTC 5156 [at 6369], 2013 FCA 200
The Minister's Reply was found to be inadequate to support that the taxpayer had sold partnership units constituting an alleged tax shelter (see...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(1) - Tax Shelter | Reply must specify "statements or representations" that established tax shelter | 177 |
See Also
Blier c. La Reine, 2003 TCC 505 (Informal Procedure), briefly aff'd 2004 DTC 6726, 2004 FCA 236
Before finding that the appellants, who clearly had promoted what was a tax shelter given that investor paid 32% of the amount invested and...