Blogue

Evoy Estate v. R. - TCC: Trusts under testator’s will cannot be treated as one trust under 104(2)

24 novembre 2016 By Bill Innes

Précis: Subsection 104(2) is an example of a very early avoidance provision of the Act that goes back to the Income War Tax Act. It was essentially designed to prevent separate trusts from benefiting from graduated marginal rates (now only applicable in the case of some testamentary trusts) where the terms of the trusts were designed such that “the income accrues or will ultimately accrue to the same beneficiary or group or class of beneficiaries”. This appears to be the only reported decision on the provision.
Evoy Estate v. R. - TCC: Trusts under testator’s will cannot be treated as one trust under 104(2)Plus >

Cheema v. R. - TCC: Bare trust did not deprive taxpayer of HST new housing rebate

24 novembre 2016 By Bill Innes

Précis: Mr. Cheema enlisted the help of a friend, Dr. Akbari, to co-sign an agreement of purchase and sale for a new home as well as the mortgage on the property. Both Mr. Cheema and Dr. Akbari testified that Dr. Akbari did not contribute to the purchase price or the maintenance of the home and did not have any interest in the property. The Court accepted that evidence and ruled that the relationship was one of “bare trust”. As a consequence Mr. Cheema was entitled to the HST new housing rebate on the home (which CRA had denied) and allowed the appeal. There was no order as to costs since this was an informal procedure appeal.
Cheema v. R. - TCC: Bare trust did not deprive taxpayer of HST new housing rebatePlus >

Leinweber v. R. - TCC: Amendments to support arrangements not effective to entitle taxpayer to child credits

23 novembre 2016 By Bill Innes

Précis: The taxpayer and his former spouse shared custody of two children. Originally he was to pay a net amount to his former spouse. He was denied child credits for 2012 and he and his wife tried to amend their support arrangements but CRA rejected the amendments. They then applied to the Court to vary their final Order of support. The Tax Court found that neither amendment was effective. The taxpayer was still the sole person making a “net” payment to his former spouse. The appeal was dismissed. There was no order as to costs since this was an informal procedure appeal.
Leinweber v. R. - TCC: Amendments to support arrangements not effective to entitle taxpayer to child creditsPlus >

Boroumend v. R. - TCC: Court rejects taxpayer’s evidence that he never received confirmation of assessment

22 novembre 2016 By Bill Innes

Précis: The Crown moved to quash the taxpayer’s appeal of his 2003 and 2004 taxation years on the basis that it was out of time. The taxpayer argued that it was not out of time since he had never received a notice of confirmation of the assessment. While the Court found that CRA’s file was sloppy, it drew a negative inference from several aspects of the taxpayer’s conduct and concluded that he had in fact received the notice of confirmation as alleged by CRA meaning that his appeal was commenced more than 5 years after the time permitted under the Act. Costs were awarded to the Crown.
Boroumend v. R. - TCC: Court rejects taxpayer’s evidence that he never received confirmation of assessmentPlus >

Jacques v. R. - TCC: Death benefit from sister’s US 401(k) plan not taxable as a pension

22 novembre 2016 By Bill Innes

Précis: In 2009 Ms. Jacques received $389,502 in benefits under a US plan that had been owned by her late sister. The plan was a 401(k) plan and was subject to section 401(a) of the US Internal Revenue Code. CRA taxed the funds as a payment from a superannuation or pension plan. The Tax Court reviewed the evidence and concluded that the fund did not have the essential characteristics of such a plan. Accordingly the appeal was allowed with costs.
Jacques v. R. - TCC: Death benefit from sister’s US 401(k) plan not taxable as a pensionPlus >

Azhar v. R. - TCC: No HST new housing rebate for home sold shortly after purchase

21 novembre 2016 By Bill Innes

Précis: Ms. Azhar listed a house for sale 11 days after she acquired it in 2013 and sold it shortly thereafter. She maintained that the sale was motivated by changed circumstances and that her mother-in-law had in fact moved into the home prior to its sale. She applied for a new housing rebate which CRA denied. Ms. Azhar appealed to the Tax Court which dismissed her appeal, rejecting her evidence that her mother-in-law had resided at the house. There was no order as to costs since this was an informal procedure appeal.
Azhar v. R. - TCC: No HST new housing rebate for home sold shortly after purchasePlus >

Shreedhar v. R. - TCC: Assessment not nil, included $2.10 in interest - appeal allowed to proceed

21 novembre 2016 By Bill Innes

Précis: This is an oddball case that may or may not involve some unresolved family drama. Mr. Shreedhar was a student. A Registered Education Saving Plan (“RESP”) established by his grandfather reported to CRA taxable funds allegedly payable to him. CRA then assessed Mr. Shreedhar in respect of this amount but applied unclaimed education‑related deductions available to him resulting in no additional tax payable. Mr. Shreedhar appealed to the Tax Court because he said he had never received any such amount and knew nothing about the RESP. As a preliminary matter the Crown moved to quash the appeal as an appeal of a nil assessment.
Shreedhar v. R. - TCC: Assessment not nil, included $2.10 in interest - appeal allowed to proceedPlus >

Shannon v. R. - TCC: Agent repeatedly making pseudo-legal arguments banned from Tax Court

15 novembre 2016 By Bill Innes

Précis: Mr. Shannon had appeared as agent in six appeals before the Tax Court, including two before Justice Graham. He repeatedly engaged in disruptive conduct and making the type of pseudo-legal commercial arguments that have become all too common of late, e.g., “ the Income Tax Act fails to describe a taxpayer as a person who gains his or her livelihood in the private sector and thus people who do are not subject to tax” [para. 56(a)]. The Court of its own motion invited submissions on why he should not be barred from acting as an agent before the Tax Court without the prior permission of the Court.
Shannon v. R. - TCC: Agent repeatedly making pseudo-legal arguments banned from Tax CourtPlus >

Gibb v. R. - TCC: Taxpayer had no reasonable expectation of profit from horse operation - no ITCs

11 novembre 2016 By Bill Innes

Précis: Ms. Gibb has a passionate interest in horses and ran a horse farm operation for 30 years. She showed losses in all of those years except in 2003 she reported net farming income of $1,250 and in 2008 she reported nil net farming income. In 2010 and 2011 CRA denied her GST Input Tax Credits on the basis that her horse operation had no reasonable expectation of profit. She appealed to the Tax Court. The Tax Court, while sympathetic to her position, dismissed her appeal. There was no order as to costs since this was an informal procedure appeal.
Gibb v. R. - TCC: Taxpayer had no reasonable expectation of profit from horse operation - no ITCsPlus >

Revelations from the 2016 BEPS Survey Report

11 novembre 2016 By Taxnet Pro

Discover how multinational enterprises are reacting to and preparing for the BEPS Action Plan in our 2016 BEPS Survey Report.
Revelations from the 2016 BEPS Survey Report Plus >

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