Elizabeth Rebecca Potter

The Appellant appealed a reassessment that included approximately $10.1 million in its taxable income under subsection 103(1) of the Income Tax Act.

The income was realized by a partnership on the sale of condominium units.

The partnership had allocated 95% of its income to a loss company that joined the partnership just before its year-end.

The Tax Court of Canada found that the allocation to the loss company was unreasonable and that the Minister's allocation of the vast majority of the profit to the Appellant, the only partner who actively participated in the project, was reasonable.

The appeal was dismissed with costs.

This appeal concerned whether taxes collected by Enterprise Rent-A-Car on insurance products were Retail Sales Tax (RST) or Harmonized Sales Tax (HST) for assessment purposes.

Enterprise had collected and remitted these taxes as HST to the Canada Revenue Agency (CRA).

The Minister of Finance assessed Enterprise for RST, arguing Enterprise had erroneously remitted RST as HST.

The Court of Appeal found the motion judge erred by focusing on Enterprise's belief about the tax collected, rather than the factual question of what tax was actually collected.

The Court concluded that Enterprise had, in fact, collected HST, based on its invoicing practices and remittances.

As the Minister's assessments were based on "tax collected" under the Retail Sales Tax Act, and Enterprise had collected HST, the assessments had no legal basis.

The appeal was allowed, and the Minister's assessments were set aside.

A Luxembourg corporation created as a tax conduit sold shares in its Canadian subsidiary for approximately $680 million, realizing a capital gain in excess of $380 million, and claimed an exemption from Canadian income tax under the Canada-Luxembourg tax treaty's business property exemption for capital gains on shares deriving value principally from immovable property used in a business.

The Minister denied the treaty exemption and argued the general anti-avoidance rule (GAAR) applied because the respondent lacked genuine economic connections to Luxembourg.

The majority held that the Minister failed to discharge the burden of proving abusive tax avoidance, finding that the provisions of the Treaty operated as intended and that Canada had deliberately chosen not to include anti-conduit provisions in the Treaty.

The dissent would have allowed the appeal, finding that the respondent's patent lack of economic connection to Luxembourg frustrated the underlying rationale of the Treaty's allocation of taxing rights.

The Appellants, executives of a wealth management firm, transferred common shares to family trusts shortly before the firm's initial public offering (IPO).

They reported the disposition based on a historical valuation formula.

The Minister reassessed them beyond the normal reassessment period, alleging a misrepresentation of the shares' fair market value due to neglect or carelessness.

The Tax Court found that the impending IPO significantly increased the shares' value and that the Appellants were negligent in failing to consider this or seek independent valuation.

The appeals were allowed only to the extent of the Minister's concession at trial regarding the fair market value.

The applicant was wholly successful in its appeal to the Federal Court of Appeal, which awarded costs in the Tax Court of Canada to the applicant.

On a motion to determine those costs, the applicant sought a lump sum award of approximately $450,000, representing 75% of its counsel fees, while the respondent argued for the Tariff amount of $6,500.

The court applied the factors in Rule 147(3) of the Tax Court of Canada Rules, noting the large amount in issue, the importance and complexity of the general anti-avoidance rule (GAAR) issues, and the volume of work.

The court rejected the respondent's argument that a principled reason is required to depart from the Tariff, holding that the Tariff is merely a default.

The court awarded the applicant $300,000 for the appeal (50% of actual fees) plus disbursements, and additional costs for the motion itself at 50% of actual fees.