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Appeal dismissed; share transfer to spouse constituted abusive tax avoidance under GAAR.
The appellant appealed a reassessment adding a taxable capital gain to his income under the General Anti-Avoidance Rule (GAAR).
The appellant had transferred shares to his spouse through a series of transactions involving a gift and a sale, which reduced the capital gain attributed to him when the spouse subsequently sold the shares to third parties.
The Tax Court of Canada found that the sale of shares to the spouse was an avoidance transaction primarily undertaken for tax purposes.
The Court concluded that the transactions resulted in an abuse of the spousal rollover and attribution rules, and dismissed the appeal.
