| Citation: |
Tremblay v. Canada, 2010 FCA 119, [2010] 3 F.C.R. D-6 |
A-61-09 A-62-09 A-64-09 A-65-09 |
Income Tax
Income Calculation
Dividends
Consolidated appeal from four Tax Court of Canada (T.C.C.) decisions (2009 TCC 6, [2009] 4 C.T.C. 2127) ruling that disposition of shares by respondents not caught by Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 84(2)—Respondents reorganizing business affairs by incorporating 9000-8855 Québec Inc. (8855)—Engaging in share-for-share exchange with Le groupe Vidéotron Ltée (Vidéotron), pursuant to Act, s. 85.1(1)—Vidéotron becoming owner of 8855—Minister of National Revenue reassessing respondents, ruling that disposition of 8855 shares giving rise to deemed dividend under s. 84(2)—T.C.C. concluding that subordinated shares received by respondents newly issued, therefore those shares could never have been property of 8855—Whether T.C.C. erring in requiring that respondents receiving identical property in return for 8855 shares—In income tax law, legal nature of transaction paramount—Appellant not alleging sham or proceeding under Act, s. 245—Plain, ordinary meaning of s. 84 dispositive—S. 84(2) requiring appropriation or distribution of corporate assets—However, 8855 retaining entirety of assets until wounding up by Vidéotron—No distribution or appropriation of 8855 property, therefore transaction not giving rise to deemed dividend—Appeal dismissed, Blais C.J., dissenting.
Tremblay v. Canada (A-61-09, A-62-09, A-64-09, A-65-09, 2010 FCA 119, Trudel J.A. and Blais C.J., judgment dated May 12, 2010, 25 pp.)