The Lipson case explores whether the following sequence of events is “abusive” and violates CRA‘s controversial general anti-avoidance rule (GAAR).:
Money is borrowed money to buy shares in spouse’s company
The spouse uses that money to buy a house
That house is then mortgaged to repay the investment loan in step 1.
The homeowner writes off the mortgage interest.
The Lipson strategy differs from the Smith Manoeuvre in many key ways. However, the top court’s decision could still pass judgement on facets that the Smith Manoeuvre has in common with Lipson, so stay tuned.
The case will be heard in 2008.
Like news like this?
Join our CMT Updates list and get the latest news as it happens. Unsubscribe anytime.
Thank you for subscribing. One more step: Please confirm your subscription via the email sent to you.