Godcharles v. Québec Revenue Authority
1
Case Study
In the following case, the Québec Court of Appeal
determined that the interests of 8 unrelated taxpayers were so
closely aligned that they were considered to be dealing with each
other on a non-arm's length basis, thus upsetting the planned
tax relief.
Normand Godcharles ("NG") and 7 other
individuals acquired a retirement home in Québec, through
direct co-ownership of land and building (as Co-Owners), and
through shareholdings in 9118-9837 Québec Inc.
("9118"), which provided management
services to the retirement home business and held some business
assets, including goodwill associated with the business. On January
18, 2006, the 7 shareholders of 9118 sold their shares to a holding
company owned by NG for a pre-determined price. On January 20, 2006
the 7 Co-Owners of the land and building, along with 9118, sold
their assets, including goodwill from 9118, to an arm's length
purchaser, "SECA",
