Jeremy Tiger

The Minister of National Revenue denied the appellant's request for a downward transfer pricing adjustment under subsection 247(10) of the Income Tax Act.

The appellant appealed the resulting reassessments to the Tax Court of Canada.

The respondent brought a motion to quash the appeal for lack of jurisdiction.

Applying the Supreme Court of Canada's decision in Dow Chemical, the Court held that a decision under subsection 247(10) is a discretionary decision, not an assessment, and falls outside the Tax Court's jurisdiction.

The proper forum is the Federal Court on judicial review.

The motion to quash was granted without leave to amend.

The parties made written submissions regarding costs following judgments in several related appeals.

The Appellants sought partial indemnity costs for the appeals in which they were successful, while the Respondent sought substantial indemnity costs.

The Tax Court of Canada awarded lump sum costs in favour of the Respondent fixed at $1,197,942, payable by the Appellants on a joint and several basis, finding that the Respondent was entitled to partial indemnity costs at the mid to high end of the scale due to the degree of overall success, amounts at issue, complexity, and conduct of the parties.

The Appellant established several income funds and arranged for his RRSP Trust to acquire in excess of 99% of the units.

The Minister reassessed the Appellant and the RRSP Trust on the basis that the income funds were not qualified investments, or alternatively, that they were a sham, window dressing, or subject to GAAR.

The Tax Court found that the income funds were not qualified investments because they failed to meet the prescribed conditions for a mutual fund trust, specifically the requirement for a lawful distribution to the public.

The Court also found that the transactions were abusive tax avoidance under GAAR.

However, the Court allowed the appeals in part, finding that the Minister could not assess the same amounts under both subsection 56(2) and subsection 146(10.1), and that the RRSP Trust was entitled to a credit for the value of units issued in exchange for other qualified investments.