By Nicolas Baas, LL.B., LL.M. (Tax)

On May 12, 2008 we posted a blog entry commenting on the Tax Court decision of Prevost Car Inc. v. The Queen TCC 231.  On February 26, 2009 the Federal Court of Appeal released its appeal decision in this case.The FCA endorsed the Tax Court's decision in its entirety.  The facts of this case are straightforward and can be found in our May 12, 2008 blog.

A very common tax savings is the capital gains deduction that can, subject to various conditions, be utilized upon the realization of a capital gain on the disposition of qualified small business corporation shares. The deduction can shelter up to a lifetime maximum of $750,000 of capital gains. However, very careful planning must be done in most cases in order to ensure that the deduction can be utilized.

On July 14, 2008, The Department of Finance released a package of proposals to amend the Income Tax Act for various measures. Included in the package was a small amendment that proposes to tinker with the eligible dividend rules.

On April 22, 2008, the important decision of Prevost was released by the Tax Court of Canada. The facts in Prevost were quite straightforward:

Much of our firm’s day-to-day tax planning and research involves issues surrounding the purchase and sale of businesses. Such purchase and sales will often involve the acquisition and/or granting of a restrictive covenant. In many cases, the granting of the restrictive covenant could be as simple as the vendor agreeing not to compete with the purchaser’s business for a limited period of time in a specified geographical area.