Timing of Arrears Interest in GAAR Assessments

2016 TCC 190 · Tax Court of Canada

Originally published on IncomeTaxAct.ca on 16 November 2016. The law may have changed since; check the current text in the tax wiki.

Timing of Arrears Interest in GAAR Assessments

Quinco Financial Inc v The Queen, 2016 TCC 190

This was a Rule 58 Application under the Tax Court of Canada Rules (General Procedure). The question to be determined was whether, where the Minister relies on a GAAR assessment to deny capital losses, does arrears interest payable under subsection 161(1) of the Income Tax Act accrue in respect to any period after the taxpayer’s balance due date and before the issuance of the reassessment?

In other words, the Court was asked to determine when arrears interest would start to accrue where GAAR is used to recharacterize the transaction.