On 5 May 2020, the Federal Court of Appeal has made a decision on a case entitled, “2018 TCC 187”, which was against the tax authorities, but in favor of the Tax Court of Canada’s decision or the taxpayer. The Federal Court finds that the loss comprehended on the disposition of the shares was a loss from the disposition of a foreign currency, not from a disposition of shares. Again, this loss would not have been reduced under subsection 112(3.1) of the Act even if only one class of shares had been issued and, therefore, no tax benefit was realized in this case, which is necessary to support an assessment under the GAAR.
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