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Mortgage Broker News | 20 Jan 2009, 12:00 AM Agree 0
The Supreme Court of Canada has struck down a tax-reduction scheme employing the general anti-avoidance rule (GAAR) in a case that has some positive reassurances for Canadian homeowners and mortgage professionals.
  • Robert Bizzoni | 22 Jan 2009, 02:30 AM Agree 0
    Perhaps I'm understanding the article incorrectly. If the supreme court has struck down the tax reduction scheme, how can this be a positive thing for those promoting the tax deductability of mortgage interest? The courts disallowed Earls use of income attribution rules to reduce taxes.
  • editor | 22 Jan 2009, 02:50 AM Agree 0
    Thanks for the note Robert, but the court only struck down Lipson's use of his wife's interest deduction on HIS tax return, not the actual practice itself. Had it been his own interest deduction, and not his wife's, it would have been fine, at least according to the language of this case.
    So far the actual Smith Manoeuver, as it's known, is legal, hence the positive reassurance.
  • Kerry | 22 Jan 2009, 03:36 AM Agree 0
    if it was just the husband claiming the wife's interest, why would CRA use GAAR? There is sufficient legislation without GAAR to not allow interest - section 18 limitations.
  • Rob | 22 Jan 2009, 04:05 AM Agree 0
    Did they lose 40% on their investments?
    Maybe they should have kept what they had
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