CRA warning about participating in “gifting trust arrangements” and “leveraged cash donation” tax shelter plans
The Canada Revenue Agency (Canadian income tax department) has just issued another press release warning Canadian taxpayers about participating in “gifting trust arrangements” and “leveraged cash donation” “tax shelter” plans. The position of CRA is that these plans are contrary to the Canadian Income Tax Act and that CRA will deny deductions to participants. While CRA may or may not be correct, and many of the plans being offered have supporting tax opinions, any participant should expect to be reassessed and have a fight with CRA, possibly in the Tax Court of Canada and Federal Court of Appeal, before the deductions are ultimately allowed or disallowed.
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