On October 19, 2005, the Supreme Court of Canada (SCC) released two much anticipated decisions considering the general anti-avoidance rule (GAAR) under the Income Tax Act (Canada). In Her Majesty the Queen v. Canada Trustco Mortgage Company and Eugene Kaulius, et al. v. Her Majesty the Queen, the SCC ruled that the GAAR will not apply to deny a tax benefit where it may reasonably be considered that the transactions were carried out in a manner consistent with the object, spirit or purpose of the provisions of the Tax Act, as interpreted textually, contextually and purposively.

type Tax Law Bulletin - October 20, 2005