Reasoning in Sommerer Reaffirmed by FCA

Brent Kern Family Trust v Canada, 2014 FCA 230

The FCA upheld the reasoning that subsection  75(2) of the Income Tax Act  applies only to a settler or contributor and not where there is a fair market value disposition into the trust.

The FCA stated that future arguments on the basis that the decision in Canada v. Sommerer, 2012 FCA 207, is “manifestly wrong” for failure to consider the whole context of subsection 75(2) will not succeed at the FCA as there is no basis to make such a finding (Miller v. Canada (Attorney General) 2002 FCA 370 at para. 10.).

– Sas Ansari, JD, LLM, PhD (exp)

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