The appellants participated in registered tax shelter and gifting arrangements involving the donation of pharmaceuticals.
They claimed charitable donation tax credits under section 118.1 of the Income Tax Act.
The Minister reassessed them, denying the credits.
The Tax Court of Canada dismissed the appeals, finding that the appellants lacked the requisite donative intent because they expected to enrich themselves through the tax credits, which exceeded their actual cash outlay.
The court also found that the purported loans used to finance the pharmaceutical purchases were fictitious and that the fair market value of the pharmaceuticals did not exceed the cash actually paid by the appellants.
