Cases
Canadian Imperial Bank of Commerce v. Canada, 2023 FCA 91
Regarding s. 39(2) deeming an FX capital loss to be from the disposition of foreign currency, Webb JA stated (at para. 34):
It could not have been intended that a taxpayer would have been entitled to two deductions for an allowable capital loss on the disposition of a particular property – one related to the disposition of the property actually disposed of and the other related to the deemed capital loss from the disposition of foreign currency.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(3.6) | s. 40(3.6) applied to deny an FX loss arising on shares | 352 |
| Tax Topics - Income Tax Act - Section 39 - Subsection 39(2) | s. 40(3.6) applied to capital loss on shares before it was deemed to be an FX loss by s. 39(2) | 323 |
| Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions | deeming provision altered reality | 131 |
Fiducie financière Satoma v. Canada, 2018 FCA 74
A tax plan turned upon dividends that in fact were paid to a family trust (Satoma Trust) being attributed under s. 75(2) to a corporation (“9134”) that was connected to the dividend payer, so that the dividends deemed to be paid to 9134 were eligible for the intercorporate dividend deduction. Before confirming an assessment under s. 245(2) that the dividend should be included in the income of Satoma Trust, Noël CJ first found that the application of s. 75(2) to 9134 effectively precluded the dividends’ inclusion in the hands of Satoma Trust in the absence of s. 245(2), stating (at para. 36, TaxInterpretations translation):
In my view, express exclusions of this type only confirm an already-present rule. In this regard, the subjecting to tax under the Act of a “taxpayer,” applies in the singular (section 3). Nothing permits the belief that the legislator intended that the same income would be taxable in the hands of more the one taxpayer… . The same dividend cannot be simultaneously received by two persons.:
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(1) - Tax Benefit | tax benefit to trust from tax-free dividend even though not distributed to a beneficiary | 277 |
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | using ss. 75(2) and 112(1) for tax-free dividends to trust thwarted s. 112(1) object to tax earnings when ultimately distributed | 319 |
| Tax Topics - Income Tax Act - Section 3 | pervasive rule that the same income is not to be taxed in 2 persons’ hands | 148 |
| Tax Topics - Income Tax Act - Section 112 - Subsection 112(1) | abusive to use s. 112(1) so as to avoid ultimate taxation of individuals | 180 |
| Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) | use of s. 75(2) to access s. 112(1) deduction for dividend in fact received by family trust, was abusive | 286 |
| Tax Topics - Income Tax Act - Section 82 - Subsection 82(2) | s. 82(2) supports the primacy of s. 75(2) over the actual dividend recipient | 60 |
The King v. Henry K. Wampole & Co. Ltd., [1931] S.C.R. 494
S. 87(d) of the Special War Revenue Act, imposed tax on goods which were “for use by the manufacturer or producer and not for sale,” was found to apply to the distribution by a pharmaceutical manufacturer of drug samples to doctors, but for the fact that the samples had already been subject to tax in the hands of the manufacturer. As to the latter point, Anglin, CJ stated (at p. 497) that “it cannot have been the intention of the Legislature to tax the same property twice in the hands of the manufacturer.”
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 141.01 - Subsection 141.01(2) | “use” includes providing free samples | 150 |