Coast Capital Savings Credit Union v. The Queen, 2015 TCC 195, aff'd 2016 FCA 181 -- summary under Subsection 116(5)

By services, 28 November, 2015

The trustee of RRSPs was duped into purchasing shares of Canadian companies from offshore entities at a price substantially in excess of their value, so that funds of the RRSPs were effectively stripped from the RRSPs to offshore accounts. The trustee was assessed under s. 116(5) for failure to withhold. After denying a request to amend the trustee's Notice of Appeal by adding an assertion that the purchase transactions were shams, V. Miller J went on to deny a further addition asserting that the cost of the shares for s. 116 purposes was equal to their fair market value, stating (at para. 31):

[T]he tax under paragraph 116(5)(c) is assessed on "the cost to the purchaser". ... The plain-meaning of the word "cost" in this section means the price that the taxpayer gave up in order to get the property: The Queen v Stirling, [1985] 1 FC 342 (FCA).

See summary under General Concepts – Sham.

Topics and taglines
Topic
Income Tax Act - s. 116(5)
Tagline
cost of shares was cash amount required to be paid rather than FMV
d7 import status
Drupal 7 entity type
Node
Drupal 7 entity ID
333519
Extra import data
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