Counter Partners' Update Chapter on Corporate Residence Disputes & Strategies

The Tax Court confirmed that foreign tax interest is not deductible. BMO’s disciplined tax dispute strategy — early framing, agreed facts, and Rule 58 — contained the loss and shaped the trajectory.

CRA challenges are often described procedurally, but the decisive moments are structural shifts: when CRA sets out its likely position, when it formalizes that position, and when independent oversight becomes available. Each inflection point alters probabilities and options.

Tax disputes are often treated as binary. In practice, principled floors and defensible standards enable earlier, credible settlements.

Grenon v. Canada shows how mutual fund trust status can fail when execution doesn’t match form. Courts scrutinize RRSP structures that promise tax benefits without real distribution.

Ehresman shows how surplus cash can cost LCGE access when reserves and records are missing. Courts often treat silence as evidence. Outcomes turn on how those gaps are addressed.

Departure tax deferral allows taxpayers to post security. The taxpayer's deferral choices significantly impact liquidity, valuation disputes, and control in cross-border transitions.