Blogue

Farm Credit Canada v. R. – FCA: Tax Court decision affirmed – taxpayer a “loan corporation” for GST/HST purposes

23 mars 2018 By Bill Innes

Précis: The taxpayer took the position that it was not a “loan corporation” for GST/HST purposes because it did not accept deposits from the public. CRA rejected that interpretation and the Tax Court agreed. The taxpayer appealed unsuccessfully to the Federal Court of Appeal. Costs of $2,200, all inclusive, were awarded to the Crown.
Farm Credit Canada v. R. – FCA: Tax Court decision affirmed – taxpayer a “loan corporation” for GST/HST purposesPlus >

R. v. Cheema – FCA: Majority of FCA overrules the “accommodation party”/“bare trustee” exception to the GST/HST New Housing Rebate

22 mars 2018 By Bill Innes

Précis: CRA denied Mr. Cheema the GST/HST New Housing Rebate on the basis that his friend, Dr. Akbari, signed the agreement of purchase and sale for the home in question but, on the evidence, did not take title or contribute to the purchase price. The Tax Court allowed Mr. Cheema’s appeal on the basis that Dr. Akbari was an “accommodation party” or “bare trustee”. The decision was based on a number of earlier Tax Court decisions. A majority of the Federal Court of Appeal allowed the Crown’s appeal declining to accept the exception that the Tax Court had devised. Webb J.A., in dissent, would have dismissed the appeal. The majority made no award of costs either in the Federal Court of Appeal or the Tax Court.
R. v. Cheema – FCA: Majority of FCA overrules the “accommodation party”/“bare trustee” exception to the GST/HST New Housing RebatePlus >

Iggillis Holdings v. R. – FCA: FCA upholds advisory “common interest privilege” in tax planning

21 mars 2018 By Bill Innes

Précis: This is an appeal from a decision of the Federal Court which held that advisory common interest privilege was not a valid constituent form of solicitor-client privilege and accordingly allowed CRA’s application for the production by Iggillis Holdings of a document known as the “Abacus Memo” which had been produced by a lawyer for a third party and shared with Iggillis during the course of a purchase and sale transaction. The Federal Court of Appeal reversed this decision holding that the Abacus Memo was protected from disclosure by solicitor-client privilege. Thus the appeal was allowed and CRA’s application for production of the Memo was dismissed. The appellants were awarded costs both in the Federal Court and the Federal Court of Appeal.
Iggillis Holdings v. R. – FCA: FCA upholds advisory “common interest privilege” in tax planningPlus >

Grubner v. R. – TCC: No ABILs for directors paying unremitted corporate GST/HST and source deductions

20 mars 2018 By Bill Innes

Précis: The Grubner brothers claimed allowable business investment losses (ABILs) in 2012 in respect of $606,000 they had paid directly to CRA in connection with unremitted GST/HST and sources deductions of Bavara Auto Haus Inc. (“Bavara”), a corporation of which they were both directors. Justice Boyle held that there was no evidence that the Grubners acquired a debt or other obligation of Bavara for the purpose of earning income. As a result the two appeals were dismissed with costs.
Grubner v. R. – TCC: No ABILs for directors paying unremitted corporate GST/HST and source deductionsPlus >

Hughes v. R. – TCC: Another Tax Court decision upholding a disability tax credit for phenylketonuria (“PKU”)

16 mars 2018 By Bill Innes

Précis: PKU is an incurable lifelong condition which if left untreated can cause a child to suffer permanent severe brain damage. CRA denied Ms. Hughes the disability tax credit for her 15 year old daughter. Ms. Hughes appealed to the Tax Court which allowed her appeal following the example of Justice Jorré in Mullings (reported earlier on this site).
Hughes v. R. – TCC: Another Tax Court decision upholding a disability tax credit for phenylketonuria (“PKU”)Plus >

Akanda Innovation v. R. – TCC: Motion to set aside judgment of dismissal denied

16 mars 2018 By Bill Innes

Précis: The taxpayer’s appeal was dismissed when it failed to send a representative to attend a status hearing. The dismissal came after a somewhat involved history of non-compliance by the taxpayer. The taxpayer retained new counsel who moved to extend the time to file a motion to set aside the judgment of dismissal and, if successful, to set aside the judgment of dismissal. Chief Justice Rossiter dismissed the application in view of the prejudice to the Crown and the absence of a credible explanation of the taxpayer’s preceding delay. There was no order as to costs.
Akanda Innovation v. R. – TCC: Motion to set aside judgment of dismissal deniedPlus >

Lehigh Hanson Materials Limited v. R. – TCC: Court rejects Rule 58(1) application for complex SRED issues

15 mars 2018 By Bill Innes

Précis: In a rather odd application the taxpayer wanted a ruling under Rule 58(1) on whether the character of research it conducted was affected by similar research done by its competitors. Not surprisingly the Tax Court declined jurisdiction leaving the matter to the trial judge who would have a greater command of the underlying facts once the evidence was adduced.
Lehigh Hanson Materials Limited v. R. – TCC: Court rejects Rule 58(1) application for complex SRED issuesPlus >

Jayco, Inc. v. R. – TCC: Mixed success on GST/HST for RVs and parts shipped from the United States to Canadian dealers

14 mars 2018 By Bill Innes

Précis: The issue in this appeal was whether the taxpayer, Jayco, Inc., was required to collect and remit GST/HST in recreational vehicles (RVs) and parts shipped from the United States to Canadian dealers. The Tax Court held that title to the RVs passed in the United States with the result the GST/HST was not payable. In the case of parts however the Court reached the conclusion that tax was payable in view of the means by which they were transferred to Canada. Thus the appeal was allowed in part. Costs were payable to Jayco.
Jayco, Inc. v. R. – TCC: Mixed success on GST/HST for RVs and parts shipped from the United States to Canadian dealersPlus >

DiLalla v. R. – FCA: Decision that production requests overly broad and vague did not disclose reviewable error

13 mars 2018 By Bill Innes

Précis: At discovery Mr. DiLalla had asked for three kinds of documents from the Crown, all of which were refused: (1) all policies and interpretations of the Canada Revenue Agency that mention or are in relation to personal endeavours and hobbies, (2) all such documents relating to gross negligence penalties, and (3) Canada Revenue Agency’s policies as to whether a net worth audit should be completed. He appealed that refusal to the Tax Court which declined to order their production on the basis that the requests were overly broad and vague. He appealed the first two categories to the Federal Court of Appeal which dismissed the appeal, with costs, as not disclosing a reviewable error.
DiLalla v. R. – FCA: Decision that production requests overly broad and vague did not disclose reviewable errorPlus >

Nagel v. R. – TCC: No appeal from a nil assessment

12 mars 2018 By Bill Innes

Précis: Ms. Nagel was reassessed in February of 2016 for her 2013 taxation year. The reassessment was a nil assessment and showed her as resident in Saskatchewan. In November of 2016 she was again reassessed for 2013. The second reassessment was also a nil assessment and this time showed her as a resident of Nova Scotia. Ms. Nagel applied to the Tax Court for an extension of time to file a Notice of Appeal. The application was denied since there is no appeal from a nil assessment. There was no order as to costs.
Nagel v. R. – TCC: No appeal from a nil assessmentPlus >

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