Archives - mai 2017

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  Ferlaino v. R. - FCA: Stock option benefits denominated in US Dollars computed at exchange rate when exercised

  25 mai 2017 By Bill Innes

  catégories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: The taxpayer was granted employee stock options denominated in US dollars. When he exercised the options he reported the benefit based on the exchange rate prevailing at the date of the grant of the options. CRA assessed him with an employment benefit based on the exchange rate prevailing at the date of the exercise of the options. He appealed unsuccessfully to the Tax Court and then appealed to the Federal Court of Appeal. The Court of Appeal dismissed the appeal from the bench, with costs, holding that the Tax Court had made no reviewable error.
  Ferlaino v. R. - FCA: Stock option benefits denominated in US Dollars computed at exchange rate when exercisedPlus >
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  Groves v. R. - TCC: Mother, sole payer of support, cannot claim tax credits for one of two children

  24 mai 2017 By Bill Innes

  catégories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: Ms. Groves and her former spouse had joint custody of the two children of the marriage. They separated in 2011 and under the original Separation Agreement she was to pay child support to her former spouse. Under an amended Separation Agreement executed in 2015 they were each to pay child support. Ms. Groves claimed the Canada Child Tax Benefit in 2014 in respect of one child. CRA denied the claim and Ms. Groves appealed to the Tax Court. The Court held that the case law was clear that where only one parent pays child support the parent paying support is not entitled to the Tax Benefit. Thus the appeal was dismissed. There was no order as to costs since this was an informal procedure appeal.
  Groves v. R. - TCC: Mother, sole payer of support, cannot claim tax credits for one of two childrenPlus >
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  Ngai v. R. - TCC: Taxpayer purchased house as bare trustee for nephew, entitled to New Housing Rebate

  23 mai 2017 By Bill Innes

  catégories:

  • Bill Innes on Current Tax Cases
  • Commodity Tax

  Précis: In March of 2012 Ms. Ngai, a real estate agent, signed an agreement to purchase a condominium along with one of her clients. The client backed out and her nephew, Mr. Ng, took the client’s place. The evidence was that her nephew intended to occupy the condo as his primary residence and that Ms. Ngai was on title (along with her husband, Mr. Kennedy) as a bare trustee. The sale closed in December of 2012. The nephew decided that the commute was too long and put the condo up for lease and then for sale. The agreement of purchase and sale was signed in January of 2013 and the sale closed in February of 2013. Ms. Ngai applied for a New Housing Rebate which CRA refused. She appealed to the Tax Court. The Court accepted her evidence, and that of her nephew, and allowed her appeal. There was no order as to costs since this was an informal procedure appeal.
  Ngai v. R. - TCC: Taxpayer purchased house as bare trustee for nephew, entitled to New Housing RebatePlus >
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  The Armour Group v. R. - TCC: Lease cancellation fee of $2.24 million not deductible

  12 mai 2017 By Bill Innes

  catégories:

  • Bill Innes on Current Tax Cases
  • Corporate Tax
  • Federal Income Tax

  Précis: In a complex land transaction with the Province of Nova Scotia the taxpayer claimed to have paid $2.24 million by way of set off to cancel a ground lease with the Province under which its wholly-owned subsidiary, Founders Square Limited (“FSL”), was the tenant. FSL acted as a bare trustee for the taxpayer and the taxpayer claimed to deduct the payment made by FSL as a business expense. CRA denied the deduction as being on account of capital, or alternatively, a non-deductible pre-payment of rent. The Tax Court held that the payment was on account of capital and dismissed the appeal with costs to CRA.
  The Armour Group v. R. - TCC: Lease cancellation fee of $2.24 million not deductiblePlus >
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  Heron v. R. - TCC: Limited portions of the Crown’s Reply struck

  12 mai 2017 By Bill Innes

  catégories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: In its Reply the Crown pleaded that the taxpayer had been involved in criminal activity for which he was charged and convicted. The taxpayer moved to strike the impugned portions of the Reply. The taxpayer was modestly successful in that two paragraphs were struck that were pleadings of argument, and not fact. In addition one paragraph detailing the sentence the taxpayer received in the criminal proceeding was struck. The balance of the impugned pleading was not struck. There was no order as to costs.
  Heron v. R. - TCC: Limited portions of the Crown’s Reply struckPlus >
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  AG Shield Ltd. v. R. - TCC: Salary paid to main shareholders was SRED expense

  11 mai 2017 By Bill Innes

  catégories:

  • Bill Innes on Current Tax Cases
  • Corporate Tax
  • Federal Income Tax

  Précis: Tom and Gary McCrae each owned 50% of the shares of the taxpayer. The taxpayer paid each of them salary of $30 per hour based on the number of hours they spend in SRED activities. They did not receive salary for the time they spent in other corporate activities but did receive equal amounts of dividends each year. CRA pro-rated the SRED treatment based on total hours spend by each of them and the taxpayer appealed to the Tax Court. The Tax Court found that the amounts of salary claimed by the taxpayer fell within the definition of SRED and did not have to be pro-rated between SRED and non-SRED activities. The appeal was therefore allowed with costs.
  AG Shield Ltd. v. R. - TCC: Salary paid to main shareholders was SRED expensePlus >
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  Huneault v. R. - TCC: Shared custody - father cannot claim one dependant if mother does not also pay support

  11 mai 2017 By Bill Innes

  catégories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: This is yet another case where in a joint custody arrangement only one parent pays support. The Courts have established clear precedent that in such cases the payor parent is not entitled to treat one of the children as a dependant for tax purposes. Justice Boyle simply applied that precedent and dismissed the taxpayer’s appeal. There was no order as to costs as this was an informal procedure appeal.
  Huneault v. R. - TCC: Shared custody - father cannot claim one dependant if mother does not also pay supportPlus >
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  Fink v. R. - FCA: Applicant entitled to ask questions about other remission order applicants in stock option plan

  10 mai 2017 By Bill Innes

  catégories:

  • Bill Innes on Current Tax Cases
  • Other

  Précis: Mr. Fink applied for a remission order in connection with the taxation of stock option benefits. He applied for judicial review of a decision of the Assistant Commissioner of the CRA refusing to recommend that the Governor in Council issue a remission order. During the course of that application Mr. Fink’s counsel sought to cross-examine on affidavits filed on behalf of CRA. The issue before the Court of Appeal was whether Mr. Fink’s counsel could put 5 questions related to remission applications filed by other taxpayers. The Federal Court Judge directed CRA to answer the questions and CRA appealed to the Federal Court of Appeal. On appeal the Federal Court of Appeal dismissed the appeal, with costs, holding that the questions were proper.
  Fink v. R. - FCA: Applicant entitled to ask questions about other remission order applicants in stock option planPlus >
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  Thangarajah v. R. - TCC: Letter from taxpayers’ agent not a request for extension of time

  10 mai 2017 By Bill Innes

  catégories:

  • Bill Innes on Current Tax Cases
  • Corporate Tax
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: The taxpayers sought an extension of the time to file Notices of Objection for the 2011 and 2012 taxation years in respect of Notices of Reassessment issued in November of 2014. The sole question before the Court was whether a letter dated September 10, 2015 from the taxpayers’ agent could be construed as an application to extend the time to file a notice of objection. The Minister did not accept the letter as such an application and the Court agreed that it could not be so construed. Since no application had been made to the Minister within the statutory limitation period the extension application was dismissed. There was no order as to costs.
  Thangarajah v. R. - TCC: Letter from taxpayers’ agent not a request for extension of timePlus >
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  Beima v. R. - FCA: Appellant failed to adduce grounds for setting aside a compliance order

  9 mai 2017 By Bill Innes

  catégories:

  • Bill Innes on Current Tax Cases
  • Federal Income Tax
  • Personal Tax, Estate & Wealth Planning

  Précis: CRA sought and obtained a compliance order in the Federal Court after Mr. Beima interfered with the conduct of an audit in various ways, e.g., attempting to limit the number of persons working on the audit, refusing to allow the making of copies, etc. Mr. Beima appealed to the Federal Court of Appeal and the appeal was dismissed from the bench, with costs, on the basis that Mr. Beima had failed to demonstrate any reversible error on the part of the Federal Court Judge.
  Beima v. R. - FCA: Appellant failed to adduce grounds for setting aside a compliance orderPlus >