A plan for the taxpayer to avoid capital gains on his sale of shares of a corporation ("PM") would have entailed him gifting the shares to a Barbadian trust of which his wife was the sole beneficiary (so that the trust was intended to be a spousal trust), with the trust then selling the shares to his wife for a promissory note equal to the fair market value of the shares, and the trust distributing the promissory note to her on a wind-up of the trust and her selling the shares of PM to the purchaser. In finding that the transaction, if effective, would have given rise to an abuse for GAAR purposes, Campbell Miller, J. stated (at para. 119):
"Sleight of hand to inject a non-resident trust (not a legal entity but deemed an individual only for tax purposes) in the middle of a Canadian resident couple to take advantage of the tax treatment of a non-resident trust's own jurisdiction is intended to defeat Canada's policy of taxing residents on their capital gains."