Update gaar-examples-3.html

gc-proto · Sep 25, 2023 · cdbaaba · cdbaaba
1 parent 2cdb454
commit cdbaaba
Showing 1 changed file with 6 additions and 6 deletions.
diff --git a/compliance/gaar-examples-3.html b/compliance/gaar-examples-3.html
@@ -3,7 +3,7 @@
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-      <title>Examples of applying the general anti-avoidance rule (GAAR) - Tax evasion and aggressive tax avoidance – Canada.ca</title>
+      <title>General anti-avoidance rule (GAAR) - Tax evasion and aggressive tax avoidance – Canada.ca</title>
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@@ -110,7 +110,7 @@ <h2 id="h_2">Examples of when the CRA would apply the GAAR</h2>
 
 
 
-<h3 id="h_3">Surplus stripping</h3>
+<h3 id="h_2-1">Surplus stripping</h3>
 <h4>Targeted abuse</h4>
 <p>A transaction that results in the withdrawal or potential withdrawal  of surplus (retained earnings) of a corporation in a tax free manner and/or a return of capital in excess of the amount that reflects the investment made with after-tax funds. </p>
 <h4>Abusive arrangement</h4>
@@ -175,7 +175,7 @@ <h4>Transactions &ndash; Scenario 3 </h4>
  </details>
 
 
-<h3 id="h_4">Avoidance of the "stop-loss" rules</h3>
+<h3 id="h_2-2">Avoidance of the "stop-loss" rules</h3>
 <h4>Targeted abuse</h4>
 <p>Subsections 93(2)/(2.01) and 112(3) express a statutory scheme that reveal the existence of a unified policy within the Act in relation to the limitation of capital losses that may result from the disposition of shares of a foreign affiliate or Canadian corporation, by considering non-taxable dividends previously received by the corporate shareholder/taxpayer. In that regard, where transactions entered into resulted in the circumvention of these provisions, the capital loss will be denied to the extent of the amount of tax-free dividends received by the corporate taxpayer. </p>
 <h4>Abusive arrangement</h4>
@@ -201,7 +201,7 @@ <h4>Transactions</h4>
  </details>
 
 
-<h3 id="h_5">Creation of an artificial capital loss </h3>
+<h3 id="h_2-3">Creation of an artificial capital loss </h3>
 <h4>Targeted abuse</h4>
 <p>The targeted abuse is the offsetting of a capital gain with an artificial capital loss (a loss that does not reflect a true decline in value of a capital asset or where there was no change in the taxpayers' overall economic power, which results in a misuse and abuse of sections 38, 39, 40 and of the Income Tax Act when read as a whole. </p>
 
@@ -226,7 +226,7 @@ <h4>Transactions</h4>
  </details>
 
 
-<h3 id="h_6">Discretionary trusts and the application of the 21 year deemed disposition rule</h3>
+<h3 id="h_2-4">Discretionary trusts and the application of the 21 year deemed disposition rule</h3>
 <h4>Targeted abuse</h4>
 <p>The purpose of subsection 104(4) of the ITA is to prevent the use of trusts to defer indefinitely the recognition for tax purposes of gains accruing on certain types of property, mainly capital property. Subsection 104(4) generally treats capital property of a trust (other than certain trusts for the benefit of a spouse or common-law partner) as having been disposed of and reacquired by the trust every 21 years at the property's fair market value. </p>
 <p>Moreover, subsection 104(5.8) of the ITA is an anti-avoidance rule designed to prevent the avoidance of the 21-year rule through the use of trust-to-trust transfers that do not involve dispositions of property at fair market value. </p>
@@ -271,7 +271,7 @@ <h4>Transactions &ndash; Scenario 2</h4>
  </details>
 
 
-<h3 id="h_7">GAAR, statute barred years and penalties </h3>
+<h3 id="h_2-5">GAAR, statute barred years and penalties </h3>
 <p>Pursuant to subparagraph 152(4)(a)(i), a misrepresentation must be "attributable to neglect, carelessness or willful default" or it must involve the commission of fraud in order for the CRA to reassess a particular tax return beyond the normal reassessment period.  For a penalty to apply under ss. 163(2), a taxpayer must have knowingly, or under circumstances amounting to gross negligence, made a false statement or an omission in their return. </p>
 <p>The scope for their application is not limited to particular provisions of the Act, but apply for the purpose of the Act as a whole, including section 245 of the Act.  Therefore, the CRA could consider the application of either of the provisions above to tax avoidance arrangements involving the application of the GAAR. </p>
 <p>Whether ss. 163(2) penalty applies in a given case or whether there has been a misrepresentation or fraud in accordance with subparagraph 152(4)(a)(i), is a question of fact that can be determined only after a review of all the facts and circumstances. For example, a penalty may be considered in a situation where the taxpayer has disregarded the jurisprudence confirming the application of the GAAR in circumstances similar to the transaction(s) undertaken by or with the taxpayer. </p>