General Anti-Avoidance Rule (GAAR)

This module provides an in-depth exploration of Section 245 of the Income Tax Act, the General Anti-Avoidance Rule, which acts as a statutory backstop against abusive tax planning that complies with the letter but not the spirit of the law. Participants will be guided through the three-step GAAR framework articulated by the Supreme Court of Canada, with emphasis on judicial interpretation and statutory purpose. Key cases—such as Canada Trustco, Copthorne Holdings, and Alta Energy Luxembourg—will be dissected to understand the evolving jurisprudence. The module culminates in practical application scenarios, enabling CPAs to distinguish between legitimate tax planning and arrangements susceptible to GAAR reassessment. Emphasis is placed on identifying red flags, documenting commercial rationale, and advising clients within the permissible boundaries of the Act.