In explaining why, in contrast to 2005-0134731R3 F (the "Advance Ruling"), the Directorate could not rule on the proposed transactions, it stated:
[O]ne important distinction is that the Advance Ruling was essentially an intergenerational transfer of a family business whereas, in your case, a minority shareholder is essentially transferring his interest in a corporation to his brother. We are of the view that the series of proposed transactions submitted constitutes a mechanism to strip the corporation's surplus and that all the conditions for the application of the GAAR of the Act would be met.