Case information

None.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Taxation Income tax Corporations Amalgamations Undepreciated capital cost of depreciable assets owned by appellant by virtue of amalgamation Whether the amalgamation came within para. 87(1)(a) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), so that the predecessors’ undepreciated capital costs flowed through to the appellant under subpara. 87(2)(d)(ii), or whether the predecessors’ sale of the surplus to a subsidiary at the moment of the amalgamation meant that para. 87(1)(a) was not engaged If the amalgamation was a non qualifying merger, whether the “continuation” rule in para. 23(a) of the Credit Union Incorporation Act, R.S.B.C. 1996, c. 82, meant that the predecessors’ undepreciated capital costs flowed through to the appellant anyway.

Two British Columbia credit unions (collectively the predecessors) amalgamated under the Credit Union Incorporation Act, R.S.B.C. 1996, c. 82. The amalgamation took effect on January 1, 2001. The amalgamated company is the appellant. In its returns for the taxation years 2001 2004, the appellant claimed capital cost allowance (CCA) on the depreciable assets it owned by virtue of the amalgamation based on a starting undepreciated capital cost (UCC) of the capital cost of the depreciable assets when the predecessors acquired them. On reassessment, the Minister reduced the CCA to reflect a starting UCC of the amount of the predecessors’ UCC balances immediately before the merger. The Minister reached the UCC figure by taking the original purchase price and subtracting the amount claimed by the predecessors as CCA in the years after they acquired the assets. The appellant appealed the reassessments to the Tax Court of Canada. The Tax Court judge allowed the appeal in respect of the 2001 taxation year, on the ground that the reassessment was statute barred. However, the judge dismissed the appeal of the Minister’s reassessments for its 2002, 2003, and 2004 taxation years. The Federal Court of Appeal dismissed the appellant’s appeal.