Words and Phrases - "after"

Mr. A sold 1,000 shares of a listed company in a non-registered account on September 1, 2021 at a capital loss of $20,000. The RRSP of his spouse, Ms. B (who dealt with a different brokerage firm) acquired 1,200 shares of the same company on September 7, 2021. Ms. B’s RRSP sells the shares no later than September 28, 2021 (with settlement occurring two days later).

Does such sale (a) avoid the superficial loss rule, and (b) does the answer change if the shares so sold by the RRSP were reacquired by it on October 1, 2021?

(a)

After quoting the superficial loss definition, CRA stated:

Mr. A's loss is not a "superficial loss" … . [T]he RRSP trust under which Ms. B is the annuitant (a majority interest beneficiary) is a person affiliated with Mr. A who acquired a substituted property to Mr. A's property. However, the RRSP trust does not own the substituted property or have the right to acquire it at the end of the [30-day] period … .

(b)

[S]ubsection 27(5) of the Interpretation Act … specifies that where a time is expressed to begin after or to be from a specified day, the time does not include that day. In the situation presented, since the day of disposition would be September 1, 2021 and that day does not count, the last day of the period ending 30 days after that disposition would fall on October 1, 2021.

Consequently, in this situation, a person affiliated with Mr. A would have acquired a substituted property during the 30-day period after that disposition and would still own it at the end of that period. In these circumstances, subparagraph 40(2)(g)(i) would apply to Mr. A, with the result that his capital loss would be deemed to be nil.

Assuming that Ms. B's RRSP trust had instead reacquired the shares on October 2, 2021 … subparagraph 40(2)(g)(i) would not apply … .

However, the Income Tax Act contains a general anti-avoidance rule.